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FACTS,  FAU.URES,  AND  FRAUDS: 


^\cijtInttons, 


riXANCIAL,   MERCANTILE,  CRIMINAL. 


BY 


D.  MORIER  EVANS. 


LONDON : 
GKOOMBEIDGE  &  SONS,  5,  PATEENOSTEK  EOW. 

KDCCOUX. 


LONDON! 

•\  I  /* 

SHOMAS  HAKRILD,  <;'",M,^-?  PALISBTJEY  SQUARE, 


PIiESI    SIBEBT. 


U^n AHY 
mXERSlTY  01.'  CALIFORNU 
V«      ^  SAIVXA  BAilB^UU 


TO  THE  EEADER. 


This  book  has  been  on  the  anvil  of  thought  two  or  three 
years.  During  that  period  it  has  assumed  protean  shapes ; 
the  practical  results  will  be  found  in  the  succeeding  pages. 

Collecting,  as  is  my  custom,  from  time  to  time,  everything 
of  importance  bearing  upon  topics  financial  and  mercantile,  it 
may  be  readily  imagined  that  I  should  not  allow  to  escape  the 
extraordinary  revelations  which  have  marked  the  last  decade ; 
more  particularly  the  Facts,  Failures,  and  Frauds  so  pro- 
minently portrayed  in  the  progress  of  commercial  life. 

The  first  notion  was  not  to  have  compressed  these,  for  the 
most  part,  painful  narratives  into  a  single  issue,  but  to  have 
extended  them  to  a  series,  the  materials  at  command  and  in 
store  being  sufficiently  ample  for  the  purpose.  But  ou 
reflection,  and  after  a  great  mass  of  matter  had  been  pre- 
liminarily arranged,  my  time  having  meanwhile  become  more 
fully  absorbed,  that  determination  was  altered,  and  on  con- 
sultation with  my  friends,  the  Brothers  Groombridgc,  it 
was  agreed  that  one  comprehensive  volume  should  be  the 
medium  of  communication  between  me  and  the  public. 

The  work,  notwithstanding  it  has  entailed  a  considerable 
amount  of  labour,  and  no  small  share  of  expense,  is  not  put 
for^'ard  as  a  pretentious  or  infallible  production.  To  some  of 
the  views  objections  may  be  taken ;  and  individuals  whose 
conduct  may  have  encountered  criticism,  will,  probably,  be 
tempted  to  think  that  they  have  scarcely  merited  the  con- 
demnation.   But  as  in  the  majority  of  instances  the  verdict 


<  iiJtfcfV,'riV-i  - 


IV  TO   TKE   EEADEB. 

of  a  Civil,  or  the  sentence  of  a  Criminal,  Court  has  clearly 
adjudged  guilt  and  awarded  punishment,  any  vindictive 
prompting  cannot  be  supposed  to  have  dictated  the  opinions 
advanced. 

One  great  object,  and  one  alone,  induced  me  to  engage 
in  the  task  of  selecting  and  arranging  these  remarkable 
histories,  viz.,  to  bring  together  a  complete  record  of  the 
astounding  frauds  and  forgeries,  with  other  attendant  cir- 
cumstances, which  have  of  late  so  frequently  startled  the  com- 
mercial community  from  their  propriety;  and  hence,  while 
endeavouring  to  diversify  and  render  interesting  each  par- 
ticular narrative,  no  chapter  or  section  is  presented  without 
corroborative  evidence  of  the  internal  truth  of  its  contents. 
The  trials,  and  other  legal  proceediugs,  possess  a  value  beyond 
the  mere  interest  of  the  moment.  Collated  and  published  in 
this  shape,  they  will  be  always  at  hand  to  establish  dates,  and 
other  minutuB  that  may  arise,  and  be  available  either  for  the 
publicist,  moralist,  or  statist,  who  may  desire  to  consult 
them  at  any  future  period. 

The  work,  in  some  degree,  though  presented  in  a  more 
attractive  gmse,  may  be  considered  as  supplemental  to  the 
Commercial  Crisis,  1847-48,  and  antecedent  to  the  History  of 
tlie  Crisis,  1857-58,  now  prepared,  and  about  to  be  brought 
forward.  The  whole  of  these  volumes  will  exhibit,  in  a  more 
complete  form  than  already  exists,  a  vast  mass  of  important 
and  interesting  information  connected  with  the  course  of  trade 
during  the  last  twenty  years.        ' 


EiECHix  La>t;,  Lombaed  Steee::, 
Jaiuiary  12,  1859. 


COxNTENTS. 


CHAPTER  I. 

"high  art"  crime. 

Its  InanguratioD,  Development,  and  Kapid  Progress       ....    1 — 5 

CHAPTER  II. 

THE  RISE  AND  FALL  OF  MU.   GEORGE  HUDSON,  SI.P. 

The  Railway  Sj-stem — Its  Early  Introduction  and  Progressive  Expansion — 
State  of  Business  anterior  thereto — The  Appearance  of  Mr.  Hudson  on  the 
Scene,  and  his  Assumption  of  Power  in  Railway  Circles — Subsequent  Dis- 
closures, and  his  final  forced  Retirement ,    6 — 73 

CHAPTER  ni. 

WALTER  WATTS  AKD  HIS  FRAUDS  UPON  THE  GLOBE  ASSURANCE   OFFICE. 

The  Age  of  Appearance — Watts's  magnificent  but  brief  Career — His  Success  as 
a  Man  of  Fashion  and  Wealth — His  luxurious  Mode  of  Life,  alleged 
Sources  of  Income  and  Theatrical  Speculations — Failure  of  the  Latter, 
and  the  Discovery  of  his  gigantic  Frauds — The  Investigation  at  the 
Globe  Assurance  Office — The  Trial  of  the  Delinquent,  and  his  Suicide  in 
Kewgate        , 74 — 105 

CHAPTER  rV. 

THE  DEUNQUEKCIES  OF  MESSRS.  STRAHAK,  PAUL,    AND  BATES. 

The  Surprise  created  by  the  Failure — The  Blow  to  Confidence  in  the  Private 
Banking  Interest — The  Antecedents  of  the  House — The  Position  and 
Relations  of  the  Partners — Social  Standing  of  Mr.  Strahan,  and  the  Reli- 
gious Habits  of  Sir  John  Dean  Paul — Distressing  Disclosures  respecting 
the  Appropriation  of  Securities — The  Bankruptcy  of  the  Firm,  and  sub- 
sequent Criminal  Proceedings  against  the  whole  of  the  Partners    106 — 153 


VI  C02TTE5TS. 

CHAPTER  V. 

JOSEPH  -SVIXDLE  COLE  AND  THE  DOCK-WAKKANT  FRAtJDS. 

The  Origin  of  the  Frauds — The  Antecedents  of  Cole  and  bis  Associates  ia 
Business — His  Successful  Operations  and  Extension  of  his  Engagements- 
Connection  with  Davidson  and  Gordon — Failure  of  the  respective  Firms— 
The  Discovery  of  the  Transactions  with  Messrs.  Overend,  Gurney,  and  Co. 
— The  Position  of  Mr.  David  Barclay  Chapman — The  Bankruptcy  of 
Joseph  Windle  Cole,  and  of  Davidson  and  Gordon — The  Apprehension  of 
the  Former  and  the  Flight  of  the  Latter — ^The  Examination  respecting  the 
Issue  of  Spurious  Warrants — The  Disappearance  of  Maltby,  the  supposed 
Proprietor  of  Hagen's  Wharf— Trial  and  Conviction  of  Cole — Death  of 
Maltby — Subsequent  Arrest  of  Davidson  and  Gordon — Their  Trial  and 
Imprisonment 154 — ^225 

CHAPTER  VI. 

THE  FEACDS  AND    FOEGERIES    OF  JOHN    SADLEIE,  M.P.,  A2?D  LATE  LOED  OP 
THE    TREASURY. 

His  History  and  Antecedents — Appearance  as  an  Irish  Member — Abandonment 
of  Practice  as  an  Attorney,  and  Entrance  into  the  Arena  of  Railway  Excite- 
ment— His  Popularity  as  a  Man  of  Business — Acceptance  of  Seats  at  the 
Boards  of  various  Companies — Connection  with,  and  ultimate  Elevation 
to,  the  Chairmanship  of  the  London  and  County  Bank — His  Political 
Career,  and  Appointment  as  a  Junior  Lord  of  the  Treasury — Eesignation 
of  that  Position,  and  his  ultimate  Decadence — His  Operations  in  the 
Encumbered  Estates  Courts — The  Difficulties  of  the  Tipperary  Bank,  and 
the  Return  of  its  Drafts — The  Discovery  of  his  Forgeries,  and  the  Involve- 
ment of  his  Friends — His  Suicide,  and  the  subsequent  Revelations  respect- 
ing his  vaiious  Crimes ■       .    226 — ^267 

CHAPTER  VII. 

THE  EOYAIi  BRITISH  BANK — ITS  SUSPENSION  AND  GENERAL  MISMANAGEMENT. 

Its  Organization  and  Proposed  Course  of  Business — The  Attempt  to  develop 
the  Scotch  System— Parties  identified  with  its  Formation— The  Noii- 
success  of  Business — The  Attempts  to  Force  the  Popularity  of  the  Establish- 
ment— Opening  of  Branches  in  various  Districts — The  Promoters  of  the  Un- 
dertaking, Mr.  John  M'Gregor,  M.P.,  Mr.  Cameron,  and  Mr.  Mullins — Sala- 
ries paid  to  Officials— The  Discount  Operations  of  the  Bank— The  Debts  of 
the  Directors,  Manager,  etc.— Issue  of  new  Shares — Mr.  Humphrey  Brown's 
Account— Difficulties  of  the  Bank— Loss  of  Capital,  etc.— The  Operation  of 
the  Winding-up  Clause  of  the  Charter— The  Struggle  to  Preserve  Position 
— ^The  Ultimate  Decadence  of  Business — The  Suspension  in  September,  1856 
— ^The  Contest  for  the  Estate  between  the  Court  of  Chancery  and  the  Court 
of  Bankruptcy — And  the  Prosecution  aad  Trial  of  the  Directors  .  268—390 


COXTE>TS.  Tli 


CHAPTER  Vm. 

THE  CBT8TAI.  PALACE  FBAUDS  ASD   FORGERIES,  PEKPETRATED   BT  WH.LIAM 
JA3IKS   BOBSOM. 

The  Commission  of  High  Crimes — Their  Progress  and  Influence— Early  His- 
tory of  Robson — His  Juvenile  Tendencies — Appearance  in  Business  Life — 
Early  Occupation — His  Humble  Resources  and  Literary  Aspirations — 
Efforts  as  a  Dramatist,  and  Career  in  the  World  of  Letters — Subsequent 
Engagement  at  the  Great  Northern  Railway — Tlie  Development  of  his 
Taste  as  a  Man  of  Fashion,  and  his  Indulgence  in  Extravagant  Habits — 
The  Transfer  of  his  Services  to  the  Crystal  Palace  Company— His  Strict 
Attention.to  Duties  and  Business  Habits — The  Enlargement  of  his  Sphere 
of  Acquaintances,  and  the  Expenditure  necessarily  involved — His  Pro- 
motion in  his  Office,  and  the  Confidence  placed  iu  his  Integrity — The 
Confidence  of  Mr.  Fasson,  the  Head  of  the  Transfer  Department,  obtained 
and  subsequently  abused — The  First  Step  in  Crime — The  Style  of  Robson's 
Living — The  Extension  of  his  Frauds,  and  the  Modus  operandi — Acci- 
dental Discovery — Flight — Capture — Bankruptcy  and  Trial     .    391 — 431 


CHAPTER  IX. 

THE  GREAT  KORTHERN  RAILWAY  FRAUDS  AND  FORGERIES  BY  LEOPOLD 
REDPATH. 

The  Specialties  of  Redpath's  Case  —His  apparent  Honesty  and  Philanthropy- 
Deep  Hypocrisy  iu  his  Career  of  Crime — His  Early  Entrance  into  Life — 
General  Occupation  and  Tendency — His  First  Progress  and  Marriage — 
Connection  with  the  Peninsular  and  Oriental  Steam  Companj- — His  Sepa- 
ration from  that  Office — Launches  out  into  Business  as  a  Ship  and  Insurance 
Broker — Fails,  and  is  made  Bankrupt — Eventually  emerges  into  Active 
Life  again,  and  obtains  Employment  in  the  Transfer  Department  of  the 
Great  Northern  Railway  Company — His  Duties  and  Attention  to  Busi- 
ness— He  Succeeds  Mr.  Clark,  the  First  Registrar — His  Style  of  Living — 
Vaunted  Success  as  a  Speculator  and  Dealer  in  Reversionary  Interests — 
His  Original  Forgeries  Extended — Princely  and  Munificent  Charity — 
Patron  of  the  Principal  Benevolent  Institutions—  Excessive  Kindness  to 
Poor  and  Distressed  Individuals — His  supposed  Wealth  and  Resources — 
The  Detection  of  Robson  leads  to  Suspicion — Proposed  Examination  of 
Books,  and  his  Refusal  to  Entertain  the  Proposal — Threatened  Resignation, 
and  Ultimate  Attempt  to  Decamii — Flight  to  Paris — Return, and  Surrender 
to  the  Police — Second  Bankruptcy — Trial  and  Conviction  .        .    432 — 483 


CHAPTER  X. 

THE  BULUOM  ROBBERY  OS  THE  SOUTH-EASTERS  RAILWAY,  AITD  THE  CHEQUE 
FORGERIES  OS  THE  METROPOLITAN  BADK& 

The  Bullion  Robbery  detailed — Pierce,  Agar,  and  Burgess — Their  Connection 
and  Mode  of  Operations — Saward   and  Anderson — ^The  Association  of 


VUl  CONTENTS. 

Sa^vard  witn  each  Scheme  of  Depredation — Motives  of  Crime  and  Course 
of  Development — DiflSculty  overcome,  and  the  Plan  for  the  Abstraction  of 
the  Bullion  accomplished — The  Robbery  effected  while  the  Train  in 
Motion — The  Prize  seized  and  conveyed  away — Sale  of  the  Spoil,  and  the 
Introduction  of  J.  Townsend  Saward — Partition  of  the  Proceeds  of  the 
Eobbery — Committal  of  Agar  for  another  Offence — The  Revelations  of 
Fanny  Kay,  and  the  Apprehension,  Trial,  and  Conviction  of  the  Prisoners — 
The  Process  of  the  Cheque  Forgeries — Connection  of  Saward,  although  a 
Barrister,  with  Thieves — The  Artistic  Arrangements  for  carrying  out  their 
Frauds — The  Disbanding  of  this  Horde  of  Criminals — The  Efforts  of  the 
Police  to  trace  their  Career — The  Apprehension  of  Saward  and  Anderson ; 
other  Auxiliary  Accomplices — Their  final  Trial  and  Sentence  of  Trans- 
portation     .        .        .        « 484. — 595 


CHAPTEE  XI. 

THE     LONDON     AND     BASTEIiN     BANKING    COKPORATION — THE     FRAUDULENT 
TKANSACTIONS  OF  COLONEL  W.  PETRIE  WAUGH  AND  MK.  J.  E.  STEPHENS. 

The  Formation  cf  the  London  and  Eastern  Banking  Corporation — Species  of 
Business  conducted — The  Parties  who  took  the  Lead  in  the  Transactions — 
The  Character  of  Operations  intended — The  Divergence  from  the  regular 
Path  into  personal  Advances  to  the  Directors  and  Managers — The  Promi- 
nent Parties  in  these  Affairs  were  Colonel  W.  Petrie  Waugh,  a  Director, 
Mr.  Stephens,  the  Manager,  and  Mr.  Black,  the  Secretary' — Tlie  Absorp- 
tion by  the  former  of  nearly  the  whole  of  the  Capital  of  the  Bank — The 
Decadence  of  Business,  and  final  Liquidation  of  Affairs — Flight  of  Waugh 
and  Stephens — The  Bankruptcy  of  the  principal  borrowing  Director  and 
Manager — The  Bankruptcy  of  the  Bank,  and  the  Order  for  Winding-up  in 
the  Court  of  Chancery         . 596—630 


APPENDIX. 

The  London  and  County  and  the  Tipperary  Banks  ....    631 — 648 

The  Proceedings  in  Bankruptcy  of  Messrs.  Davidson  and  Gordon    .    648 — 701 

The    TYwes-Chapman  Controversy,   arising   out    of  the  Investigation  into 

the  Affairs  of  Messrs.  Davidson  and  Gordon  and  Mr.  Joseph  Windle 

Cole     .  ,       ,  .  701—727 


FACTS,  FAILUEES,  AND  FEAIIDS. 


CHAPTER   I. 

"nion  aet"  ceime — its  ixaugueatioit,  detelopment, 

A>*D    EAPID    PEOGEESS. 

The  delight  experienced  by  persons  of  a  sensitive  humanity 
at  that  alteration  in  the  criminal  code,  by  which  death  was 
declared  too  severe  a  penalty  for  the  crime  of  forgery,  must 
have  been  not  a  little  qualified  by  the  increase  of  dishonesty 
that  has  followed  the  mitigation  of  the  law.  While,  on  the 
one  hand,  the  dread  of  that  punishment,  which,  whatever 
specious  argument  may  be  advanced  to  the  contrary,  will 
ever  be  regarded  with  the  greatest  awe  by  the  multitude, 
has  been  cancelled  from  the  list  of  moral  obstacles ;  on  the 
other  hand,  a  variety  of  circumstances  favourable  to  the  most 
reckless  speculation  have  arisen  to  remind  the  world  of  the 
old  days  of  the  South  Sea  and  the  Mississippi  speculations, 
and  a  generally  diffused  taste  for  luxurious  living  has  proved 
a  constant  incentive  to  profuse  expenditure.  With  tempta- 
tions to  crime  infinitely  multiplied,  and  with  impediments 
reduced  to  a  minimum,  it  is  no  wonder  that  the  last  twenty 
years  afford  materials  for  one  of  the  darkest  pages  in  the 
commercial  history  of  this  country — that  many  have  arrived 
at  a  "high  art"  in  guilt,  while  "high  arts"  of  a  more 
innocent  kind  have  beeu  manifestly  on  the  decline. 

Without  any  great  violence,  all  the  incentives  to  commer- 
cial crime  may  be  brought  under  the  one  common  rubric — the 
desire  to  make  money  easily  and  in  a  hurry.  The  apprentice- 
boy,  who  robs  the  till  of  a  few  shillings  in  order  that  he  may 
enjoy  himself  on  a  particular  evening ;  the  gigantic  forger  or 

B 


2  FACTS,   FATLUEES,   A>*D   FEAUDS. 

swindler,  who  absorbs  thousands  that  he  may  outshine  the 
people  who  live  and  breathe  around  him,  are  so  far  in  the  same 
predicament  that  they  cannot  endure  any  delay  to  the  gratifi- 
cation of  this  common  passion.  Apart  from  these,  but  still 
actuated  by  the  same  desire,  is  the  reckless  speculator,  who 
would  risk  everything  in  the  hope  of  a  sudden  gain,  rather 
than  toil  safely  and  laboriously  for  a  distant  reward.  The 
speculator  may,  of  course,  be  a  perfectly  honourable  man,  who 
would  instinctively  shrink  from  any  deed  that  would  invoke 
the  interference  of  the  criminal  law ;  but  if  fortime  is  adverse, 
he  is  on  the  high  road  to  wrong-doing,  and,  moreover,  there 
are  many  crimes  not  enumerated  in  the  statute-book  that  are 
still  heavy  sins  against  the  dictates  of  morality. 

The  bubble  period  of  1825-6 — the  oldest  within  the 
memory  of  the  present  generation — and  the  money  crisis  of 
1836-7,  appear  rather  as  forerunners  to  the  events  that  have 
more  recently  shaken  the  world,  than  to  be  new  links  in  the 
series.  It  is  with  the  railway  mania  of  1845  that  the  modem 
form  of  speculation  may  be  said  to  begin,  and  the  world  has 
not  yet  recovered  from  the  excitement  caused  by  the  spectacle 
of  sudden  fortunes  made  without  trouble,  and  obscure  indi- 
viduals converted,  as  if  by  magic,  into  onillmiaires.  Long 
will  Mr.  Hudson  be  remembered  as  an  instance  of  the  celerity 
with  which  a  reputation  could  be  won  and  lost  at  that 
eventful  and  remarkable  epoch.  In  the  early  days  of  the 
mania,  his  name  seemed  to  possess  a  talismanic  value;  the 
mere  fact  that  it  was  associated  with  any  scheme  being  alone 
sufficient  to  cause  a  demand  for  shares,  and  a  consequent 
rapid  advance  in  prices.  When,  on  the  other  hand,  the  dis- 
covery Avas  made  that  this  idol  of  the  money-market  had  been 
guilty  of  the  grossest  mismanagement,  causing  a  false  appear- 
ance of  prosperity  by  the  presentation  of  deceptive  accounts, 
then  every  one  was  ready  to  assail  the  object  he  had  so 
blindly  worshipped.      However,   notwithstanding  the    great 


TACTS,  FAILTJEES,   A^TD   FEAUDS.  8 

show  of  virtuous  indignation  that  took  place  when  the  mis- 
deeds of  the  celebrated  Mr.  Hudson  were  discovered,  and  he 
was  forced  to  disgorge  part  of  his  ill-gotten  wealth,  there  is 
no  doubt  that  the  generally  diffused  rage  for  speculation  had 
considerably  lowered  the  standard  of  commercial  morality,  and 
that  many  men  perpetrated  deeds  they  would  liave  blushed 
even  to  contemplate  a  few  years  previously.  Those  individuals 
who  were  unfortunate  enough  to  be  exposed,  must  not  be  sup- 
posed nearly  to  represent  the  whole  amount  of  special  delin- 
quency committed  during  the  speculative  era,  since  numbers 
of  persons  equally  guilty,  escaped  public  contumely,  simply 
because  they  had  not  the  misfortune  to  be  found  out. 

Eminently  characteristic  of  the  period  is  the  extraordinarily 
large  scale  on  which  ordinary  crimes  are  planned,  and,  for  the 
moment,  successfully  carried  out.  From  time  immemorial, 
clerks  have  been  discovered  embezzling  the  property  of  their 
employers ;  but  when,  save  in  the  middle  of  the  nineteenth 
century,  could  it  be  supposed  a  case  such  as  that  of  "Walter 
"Watts  would  occur,  who,  not  content  with  trifling  peccadilloes, 
successively  opened  two  theatres  with  money  surreptitiously  ob- 
tained from  the  Globe  Insurance  Company,  and  managed  them 
in  a  style  of  undisputed  magnificence  in  the  face  of  empty  treasu- 
ries. The  career  of  Watts,  and  his  melancholy  end  in  Newgate — 
death  by  his  own  hand — may,  in  part,  be  regarded  as  a  symbol  of 
that  taste  for  luxury,  and  that  recklessness  in  the  choice  of  means 
to  a  desired  end,  which  so  singularly  distinguish  the  present  age. 

Many,  however,  are  the  names  who  stand  prominent  in 
the  history  of  what  may  appropriately  be  termed  "  high  art" 
crime.  "Watts's  case  was,  in  some  measure,  isolated,  and 
partook  of  the  nature  of  an  individual  eccentricity;  but  the 
fifiiluTe  of  Messrs.  Stralian,  Paul,  and  Bates,  and  the  punish- 
ment with  which  their  dealings  were  visited,  commenced  that 
series  of  financial  and  commercial  delinquencies,  in  which 
persons  of  supposed  elevated  character  were  involyed,  that  all 


4  FACTS,   TAILTJEES,   A>'D   FBAUDS. 

the  received  tests  of  respectability  seemed  to  be  of  no  avail, 
and  people  literally  could  not  tell  -whom  they  might  trust.  The 
extensive  delinquencies  of  J.  Windle  Cole  and  his  associates, 
the  speculative  career  and  suicide  of  John  Sadleir,  the  failure  of 
Tipperary  Bank,  the  explosion  of  the  Eoyal  British  Bank,  and 
the  subsequent  liquidation  of  the  London  and  Eastern  Banking 
Corporation,  with  the  revelations  of  management,  shook  public 
confidence  in  every  direction ;  and  through  the  latter  even  the 
better  class  of  joint-stock  banks  were  regarded  with  a  transient 
suspicion,  through  the  misdealings  of  their  misguided  and  dis- 
honest competitors.* 

In  the  deliberate  forgeries  of  Crystal  Palace  shares,  as 
committed  by  Eobson,  seem  to  have  occurred  a  second,  and 
if  possible  more  elaborate,  edition  of  Watts's  case.  A  clerk, 
with  barely  an  income  to  support  a  respectable  station,  was 
seized  with  a  desire  to  become  a  gentleman  of  fashion  and 
fortmie — a  Maecenas  to  whom  artists  might  look  up  with 
reverence.  JNot  content  with  the  fame  of  a  dramatist,  he 
assisted  managers  in  their  theatrical  speculations ;  his  style  of 
living  was  of  a  kind  that  upholsterers  still  speak  of  him  with 
admiration  for  his  taste  and  powers  of  arrangement.  As  a 
strong  and  severe  contrast  to  Hobson,  who  by  his  specious 
frauds  forced  himself  into  the  character  of  an  elegant  man  of 
pleasure,  stands  Leopold  Eedpath,  the  fabricator  of  Great 
Northern  shares,  which  provided  him  the  means  of  assuming 
the  position  of  the  man  of  heavy  respectability.  Serious  people 
might  reconcile  themselves  to  the  fate  of  the  gayer  delinquent, 
and  even  enlarge  on  the  consequences  of  worldly  dissipa- 
tion; but  Kedpath,  the  model  of  morality  and  charity — the 
adopter  of  children  and  the  dispenser  of  wealth  to  deserving 

*  While  these  pages  are  passing  through  the  press,  the  delinquencies 
connected  with  the  administration  of  the  Liverpool  Borough  Bank,  the 
Western  Bank  of  Scotland,  and  the  Northumberland  and  Durham  District 
Bank  have  been  brought  to  light,  and  tend  to  confirm  the  views  expressed 
in  this  introductor)'  chapter. 


FACTS,  FAILURES,    AOT)  THAUDS.  9 

institutions — was  a  blot  discovered  where  it  was  least  expected, 
and,  as  niigltt  be  anticipated,  occasioned  proportional  surprise. 

The  Englishman  may  find  a  melancholy  consolation  in  the 
reflection  that  the  complicated  tale  of  imprudence  and  its 
results,  of  crime  and  its  punishment,  is  not  confined  to  his  own 
country.  America  has  her  corresponding  infamies  in  the  sliape 
of  the  Schuyler  delinquencies,  and  the  lengthened  chain  of  fraud 
and  dishonesty  reaches  as  far  as  remote  California,  with  the  no- 
torious defaulter  Meiggs,  and  the  Antipodes,  where  the  system 
of  false  letters  of  credit  has  again  been  brought  into  vogue. 

In  this  prefatory  chapter  it  is  intended  merely  to  indicate 
the  cases  of  guilt  that,  in  the  course  of  this  work,  will  be 
attempted  to  be  described  in  detail.  The  closeness  with  which 
one  crime  follows  upon  another,  and  the  similarity  of  motive 
that  lies  at  the  bottom  of  them  all,  will  sufficiently  show 
that  they  do  not  represent  the  simple  perverseness  of 
individual  natures,  but  are  so  many  indices  of  a  depreciated, 
and  apparently  bad,  moral  atmosphere  that  has  of  late  pervaded 
the  whole  of  the  commercial  world.  The  fact  stands  self- 
evident  that  the  ruling  passion  is  the  grand  desire  to  make 
money  expeditiously,  for  the  purpose  of  gratifying  luxurious 
propensities,  or  of  indulging  in  an  imposing  ostentation.  The 
artificial  necessity  for  expenditure  comes  first,  and  the  begin- 
ning of  financial  crime  is  the  attempt  to  make  an  appearance 
which  the  legitimate  resources  of  the  adventurer  in  the  game 
of  fortune  will  not  justify.  Other  resoui'ces  must,  therefore, 
be  found,  and  thus  fraud,  forger^-,  and  misappropriation  are 
called  into  existence,  with  all  their  frightful  and  heavy  legal 
responsibilities.  Indeed,  unless  the  extravagant  and  pretentious 
habits  of  the  age  are  brought  within  more  restrained  limits, 
the  volume  now  presented  to  the  public,  full  aa  it  is  of  the 
painful  records  of  dishonesty,  will  be  only  as  a  single  page 
in  a  vast  and  ever  increasing  history  of  the  decline  and  fall  of 
mercantile  morality  throughout  the  civilized  world. 


TACIS,  FAILUEES,   A^'I>  ECAUDS. 


CHAPTEE   II. 

THE    EISE   AIS'D   TALL   OF    HE.    GEOEaE   HUDSO"",   IM.P. 

TLe  Eailway  System — Its  Early  Introduction  and  Progressive  Expansion — 
State  of  Business  anterior  thereto — Tlie  Appearance  of  Mr.  Hudson 
on  the  Scene,  and  his  Assumption  of  Power  in  Railway  Circles — Sub« 
sequent  Disclosures,  and  his  final  forced  Ectirement. 

The  superiority  of  railway  transit  to  other  means  of  com- 
munication is  now  so  generally  conceded,  that  no  surprise  can 
be  felt  at  tlie  further  indefinite  demand  for  its  extension.  The 
railwajs  already  formed  constitute,  in  history,  the  record  of 
a  clearly-defined  period  of  transition — one  of  those  ever-recur- 
ring cycles  in  which  long  suspense  and  needless  delay  in  the 
application  and  extension  of  scientific  invention,  has  been 
followed  by  the  enthusiastic  entertainment  of  new  and  novel 
enterprises,  terminating  in  a  wild  and  general  mania.  What 
the  character  of  that  mania  was,  most  persons  are  well  able  to 
remember ;  viz.,  its  early  and  bright  phases  which  promised  full 
reward  to  all  who  engaged  in  it ;  and  its  subsequent  sombre  re- 
action, accompanied  by  disclosures  which  compromised  high 
names,  and  caused  almost  universal  depression  and  distress. 

Following  the  date  when  the  superiority  of  the  railway 
became  to  be  admitted,  the  period  is  arrived  at  which  the  most 
vital  conditions  of  success  were  neglected,  and  the  circumstance 
of  directors,  under  the  bias  of  temptations  which  they  found  irre- 
sistible, were  witnessed  sacrificing  to  immediate  gain  the  future 
interests  of  their  companies.  By  supplying  tlie  public  with  ficti- 
tious data,  and  stimulating  further  outlays  by  a  dispropor- 
tionate return  on  investments,  the  resources  of  the  old  lines 
were  weakened  through  the  endeavour  to  evade  legislative  pro- 
visions for  limiting  profits ;  boards  entered  on  endless  schemes 


FACTS,    PAILUEES,   A2fD   FBATJDS.  7 

for  the  creation  of  stock  when  shares  were  at  a  premium,  though 
the  new  enterprises  might  afford  hut  small  returns,  and  thus 
diminish  the  general  rate  of  profit  derivahle  from  trunks  and 
existing  branches.  The  result  was  far  more  agreeable  to  indi- 
viduals to  whom  means  were  thus  afforded  of  securing  hijrh 
premiums  on  new  shares  than  to  those  who  purchased  secu- 
rities unduly  enhanced  in  price  as  permanent  investments,  this 
course  of  proceeding,  in  the  way  of  financial  management,  lead- 
ing to  ruinous  disappointment  and  serious  national  incon- 
venience. Though  the  low  price  to  which  shares  ultimately 
fell  was  generally  attributed  to  the  injudicious  location  of 
lines,  the  inadequacy  of  their  traffic,  and  the  exorbitancy  of 
their  cost,  all  these  are  insufficient  to  account  for  that  undue 
depreciation  which  railway  property  underwent,  and  from  which 
it  has  scarcely  yet  recovered.  For  this  depreciation  reference 
must  be  made  to  the  means  taken  by  proprietors  to  enable 
them  to  divide  among  themselves  millions  of  pounds  sterling 
in  the  way  of  premiums,  to  the  creation  of  nominal  capital  far 
exceeding  the  actual  outlay,  and  to  the  exhaustive  eflects 
resulting  from  the  highest  allowable  dividends  being  paid 
irrespective  of  legitimate  receipts. 

Amidst  the  efforts  put  forth  for  the  construction  of  railways 
in  connection  with  the  early  lines,  and  the  rise  of  new  and  rival 
companies,  which  made  it  expedient  for  those  of  an  older  date  to 
endeavour  to  secure  the  advantages  they  already  enjoyed  by  set- 
ting about  planning  branches  in  different  directions,  without 
any  view,  however,  to  a  complete  consentaneous  system,  may  be 
distinguished  as  standing  out  from  these  multiform  contests 
which  led  to  irremediable  sacrifices,  the  apparent  evidences  of 
a  certain  dual  energy  and  power,  exhibited  on  a  gigantic  and 
hitherto  imparalleled  scale,  between  tho  eastern  and  western 
counties  of  England.  The  two  grand  branching  routes  of 
southern  trunk-lines  proceeding  northward,  after  becoming  in 
a  manner  interlocked  in  the  great  central  belt,  again  emerge, 


S  TACTS,   TAILURES,    A>D    FnATJDS. 

by  Preston  on  the  one  side  and  York  on  the  other,  to  follow 
but  remotely  convergent  courses,  the  western  line  taking  the 
more  natural  route  of  traffic  to  and  from  Scotland,  the  other 
tending  shoreways  to  the  most  northerly  headland  this  side 
the  Pirth  of  Porth,  and  thence  striking  directly  for  Edinburgh, 
thus  briuging  the  south-eastern  counties  of  England  into  con- 
nection and  separate  relation  -prith  all  the  more  northerly  points 
with  which  any  extensive  communication  or  direct  trade 
is  supported.  The  energy  of  the  impelling  power  by  which 
the  extension  of  these  linlis  was  promoted,  is  evidenced  in  the 
rapidity  with  which  the  new  works  were  undertaken  and 
executed.  Now  that  resources  have  been  more  fully  deve- 
loped, and  the  industrial  and  trading  interests  of  cities, 
towns,  and  districts  originally  affected,  have  been,  in  the 
course  of  things,  adjusted,  it  would  seem  to  the  casual  observer 
that  the  construction  of  these  lines  was  the  mere  realization 
of  sagacious  and  wise  views  on  the  part  of  those  who 
promoted  them,  when,  in  fact,  a  great  majority  owe  their 
creation  to  the  most  extravagant  deceptions  and  the  wildest 
illusions — to  financial  speculation  rather  tlian  to  any  intelligible 
appreciation  of  the  practical  bearings  of  railway  undertakings. 
The  modus  operandi  by  which  the  "  secondary  foi'mation"  was 
brought  about  may  be  thus  explained  :  The  old  and  rich  lines 
became  the  trunk  or  stock  of  numerous  offshoots,  guaranteeing, 
on  a  certain  rate  of  dividend,  the  shares  on  extensions  or  amal- 
gamations, thus  securing  for  existing  proprietors  large  profit 
on  the  issue  of  shares  at  par  when  at  a  premium  in  the  market. 
Extensions  at  an  end,  or  shares  at  par,  no  longer  realizing  a 
premium,  the  first  proprietors  in  the  original  line  left  their  suc- 
cessors to  gather  what  they  could  from  boughs  stripped  well 
nigh  bare,  and  these  again  left  their  successors  exposed  to  the 
full  consequences  of  this  successive  addition  to  nominal 
capital,  and  to  increased  obligations. 

Perhaps  it  may  have  proved  advantngeous  in  the  end  to 


FACTS,   FATLUBES,   AVD   FBAUD3.  9 

the  general  interests  of  society,  that  so  much  was  left  to  be 
accomplished  by  financial  dexterity,  vague  speculative  antici- 
pations, and  legislative  enactments,  which  only  confirmed 
existing  illusions,  instead  of  a  more  intelligent  appreciation  of 
the  undertakings  entered  upon  on  the  part  of  the  public,  and 
which  would  have  had  the  effect,  by  limiting  their  numbers,  of 
keeping  England  far  in  the  rear  of  her  present  vantage  ground. 
It  is  evident  that  a  certain  amount  of  inherent  selfishness,  the 
growth  of  too  much  isolation  both  of  communities  and  indi- 
viduals, had  to  be  overcome  before  these  great  channels  of 
intercourse  and  traflic  could  be  fairly  opened,  and  the  busi- 
ness appropriately  fell  into  the  hands  of  those  who  were 
chiefly  concerned  in  obtaining  an  unfair  advantage  of  the 
almost  unrestricted  powers  conferred  by  Parliament,  and  the 
unguided  and  undisciplined  enthusiasm  of  the  public. 

The  principal  individual  who,  in  that  almost  Titanic  period 
of  warfare,  struggle,  and  accomplishment,  eminently  distin- 
guished himself  in  connection  with  railway  extension,  was  Mr. 
George  Hudson.  His  ability  was  exhibited  in  pioneering 
new  lines  through  every  difficulty,  in  organizing  fresh  com- 
binations, and,  where  the  materials  were  yielding,  and 
unformed,  adapting  the  parts  of  complex  organization  to  one 
another,  thus  affording  new  vigour  to  undertakings  that  would 
have  fallen  short  of  their  purpose,  consolidating  various  inde- 
pendent enterprises,  that  separately  might  have  worked  the 
ruin  of  their  projectors,  and  rendering  available  to  practical 
purposes  an  enthusiasm  that  would  have  wasted  itself  in 
divided  interests. 

It  was  no  wonder  that  the  spirit  of  railway  enti-rprise, 
kindling,  after  her  first  great  successes,  point  after  point 
throughout  the  kingdom,  on  touching  with  her  magic  wand  the 
city  of  York,  should  have  found  men  ready  and  willing  to 
entertain  the  project  of  securing  for  that  locality  the  advantages 
resulting  from  this  means  of  transit.     Of  this  number  was 


10  PACTS,  PMLrEES,   AXD   FEAUDS. 

Mr.  George  Hudson,  ^vlio  at  the  time  was  simply  a  member  of 
the  Board  of  Health,  with  no  other  position  than  that  derived 
from  a  life  of  continued  assiduity,  and  who  as  a  linen-draper, 
had  secured  a  moderate  fortune,  his  family  being  respectable 
and  ■well-established  in  the  coxmty,  having  occupied  for  at  least 
two  centuries  an  estate  at  Howsham,  Mr.  Hudson  had  reached 
mature  age,  but  he  was  to  prove  himself  "  the  man  for  the 
occasion,"  and  was  destined  to  operate,  with  no  inconsiderable 
influence,  both  in  giving  stability  to  those  enterprises  about 
beiug  called  into  existence,  and  in  making  the  most  of  the 
powers  which  Parliament,  public  confidence,  enthusiasm,  cre- 
dulity, or  any  of  the  thousand  and  one  conflicting  motives 
which  came  to  support  the  movement.  It  was  felt  that  the 
city  of  York,  if  true  to  her  own  interests,  must  bestir 
herself  shortly  in  tlie  matter,  and  to  extend  a  railway  into 
the  "West  Eiding  appeared  to  be  the  most  obvious  mode 
of  securing  these  facilities.  Hudson  had  looked  to  the 
history,  financial  and  otherwise,  of  the  railways  then  in  exist- 
ence, or  forming,  and  was  satisfied,  from  the  first  conception  of 
of  the  idea,  that  a  railway  running  out  in  that  direction,  if 
planned  with  moderate  judgment,  economically  constructed, 
and  efliciently  managed,  could  not  fail  to  succeed.  The  com- 
plex character  of  railway  management,  as  compared  with  any 
other  enterprise,  only  served  as  an  additional  motive  with  him 
to  entertain  the  project.  He  was  favourably  situated,  too, 
for  secm-ing  it  public  attention.  In  the  municipal  post  to 
which  he  had  been  nominated,  he  had  shown  to  his  fellow- 
townsmen  his  capacity  to  appreciate  the  general  interests  of 
the  city,  as  far  as  they  related  to  that  department,  and  execu- 
tive ability  in  carrying  out  improvements.  Indeed,  Mr. 
Hudson's  reputation  for  public  spirit  and  practical  efficiency 
was  slowly  but  surely  rising.  His  name  was  already  enrolled  in 
the  Book  of  Fate  for  the  highest  civic  honour  that  York  could 
bestow.    It  is  possible  that  even  to  himself  the  golden  mace 


PACTS,   rATLTTBES,  A>*D  rHAUDS.  U 

of  the  mayoralty  may  have  floated  distantly  in  dreams, 
but  he  could  never  have  anticipated  becoming  "  the  almosrt 
irresponsible  monarch  over  a  thousand  miles  of  railway,"  con- 
trolling the  money-market  of  the  kingdom,  dispensing  with  a 
word,  creating  millions  of  capital  by  a  single  fiat,  and  much 
less  that  after  receiving  the  homage  of  the  titled  and  the 
great,  and  being  obsequiously  listened  to  as  a  member  of 
the  Legislature — Hebrew  and  Christian  bankers  even  ac- 
knowledging by  testimonials  his  superior  potency — it  was 
possible  he  could  be  "driven  from  the  face  of  men,"  under 
the  ban  of  public  opinion,  through  revenge  for  wounded  self- 
esteem  on  the  idol  it  had  so  slavishly  worshipped. 

A  public  meeting  was  caUed  by  the  promoters  of  the  pro- 
jected railway  in  1833,  at  which  !RIr.  Hudson  was  a  prominent 
speaker.  He  dwelt  on  the  advantage  to  be  derived  from  the  line, 
if  carried  out  and  completed,  and  adverted  to  the  cheaper  cost 
of  construction  and  working  which  experience  and  skill  rendered 
possible.  This  meeting  was  merely  preparatory  to  others,  at 
which  the  various  features  of  the  undertaking,  as  suggested, 
were  vigorously  canvassed;  Mr.  Hudson  and  his  associates 
presently  resolving  themselves  into  a  provisional  committee, 
and  diligently  set  about  procuring  all  necessary  information, 
and  sustaining  the  requisite  surveys.  At  one  of  these  meet- 
ings, held  towards  the  close  of  the  year,  IVIr.  Hudson  electri- 
fied his  too  apathetic  auditors  by  subscribing  to  four  or  five 
hundred  shares — an  act  considered  the  more  venturesome,  as 
the  very  route  of  the  line  was,  as  yet,  a  matter  of  conjecture. 
"When  a  route  ofiering  superior  advantages  to  one  which  had 
been  surveyed  was  suggested,  Mr.  Hudson  himself  set  out  to 
explore  the  neighbouring  districts,  so  wholly  had  ho  taken 
upon  himself  already  the  details  of  the  enterprise.  Advan- 
tage was  taken  by  Mr.  Hudson,  on  this  occasion,  to  ascertain 
the  feelings  and  learn  the  means  of  owners  of  property  along 
the  proposed  route,  and  to  conciliate  them  as  far  as  possible. 


12  FACTS,   FAILUEES,    A2fD   FRAUDS. 

He  enlightened  landoAvners  as  to  the  value  to  be  thus  added 
to  their  estates  by  the  new  means  of  access  afforded  their 
tenants  to  profitable  markets,  and  with  such  success,  that  the 
opposition  to  the  sale  of  the  required  sites  rapidly  disappeared, 
and  the  proprietors  who  had  seen  prospectively  only  the  inva- 
sion of  estates,  and  the  destruction  of  immense  masses  of 
property  in  the  inns  and  appurtenances  of  a  great  highway, 
became  ardent  supporters  of  the  undertaking.  It  must 
be  added  that  "  the  appeal  persuasive,"  was  not  unfrequently 
the  gift  of  certain  shares  in  the  line.  Eeturning  to  York,  he 
met  all  the  objections  that  were  urged  on  the  score  of  expense, 
but  there  Avas  abundant  evidence  to  show  that  the  public  as 
a  body  was  not  yet  fully  prepared  for  the  change. 

From  the  consultations  that  had  been  held,  the  surveys  that 
had  been  made,  and  the  estimates  that  had  been  framed,  the 
scheme  began  to  assume  a  more  tangible  shape,  and  recourse 
was  had  to  Mr.  George  Stephenson,  who  met  the  committee 
by  appointment  to  confer  with  them  as  to  the  route,  con- 
struction, and  completion  of  the  line.  The  contrast  presented 
between  George  Stephenson  and  George  Hudson,  who  now 
for  the  first  time  met  together,  was  striking  and  impressive. 
Stephenson,  at  the  head  of  his  profession,  engaged  in  subduing, 
by  the  aid  of  engineering  science  and  the  exercise  of  indo- 
mitable energy,  all  the  material  conditions  involved  in  the  exe- 
cution of  the  plans  with  which  he  was  entrusted ;  Hudson, 
sagaciously  watchful  of  all  the  means  by  which  an  enterprise 
like  that  on  hand  might  be  rendered  remunerative ;  the  one,  in 
spirit,  manner,  and  the  general  tone  and  flow  of  his  discourse, 
exhibiting  discipline,  study,  practice,  and  acquaintance  with 
the  difiiculties  attending  operations  which  others  regarded  in 
a  financial  light ;  the  other,  personifying  the  moving  power  of 
every  enterprise,  by  which  those  plans  were  vitalized — shares, 
loans,  premiums,  dividends.  After  glancing  at  the  projects 
■which  had  been,  with  no  little  enthusiasm  submitted  to  him, 


TACTS,   FAILURES,  AND   FRAUDS.  18 

Stephenson  quietly  laid  the  proposed  plans  aside,  and  described 
the  lines  of  railway  then  in  course  of  completion,  or  about 
being  constructed,  so  far  as  they  affected,  or  were  likely  to 
affect,  the  present  enterprise,  and  advised  some  further  delay 
until  they  could  aiTange  a  more  complete  connection  than  was 
now  possible  with  lines  already  in  progress. 

The  committee  accordingly  deferred  the  execution  of  their 
scheme,  and  set  themselves  to  study  the  progress  of  those  out- 
branching  lines  to  which  Stephenson  had  referred  them.  The 
railways  commenced  in  the  south  of  England  were  seen,  week 
by  week,  pushing  further  north.  A  watch,  too,  was  kept  on 
the  neighbouring  city  of  Leeds.  Soon  activity  displayed  itself 
at  a  point  calculated  to  excite  the  most  zealous  emulation.  A 
railway  was  about  being  constructed  to  run  eastward  from 
Leeds  to  Selby,  there  to  meet  the  Hull  and  Selby,  and  thus 
not  only  securing  for  Leeds  the  traffic  lying  between  it  and  the 
mouth  of  the  Humber,  but  the  advantages  which  Hudson  had 
marked  out  for  his  own  of  a  more  close  connection  with  the 
south  of  England.  The  serious  entertainment  of  that  project 
was  taken  as  the  signal  of  the  Newcastle  engineer,  and  no  time 
was  lost  in  applying  for  the  necessary  powers  to  enable  York 
to  connect  with  the  North  Midland,  and  thus  to  be  brought, 
by  means  of  existing  lines,  into  direct  communication  with 
London.  Several  years  had  now  elapsed  from  the  origin  of  the 
scheme,  but  meanwhile  public  opinion  had  been  enlightened, 
and  though  many  were  inclined  to  view  the  railway  as  unne- 
cessary, there  was  a  spirit  of  co-operation  abroad  which 
augured  well  for  its  success. 

In  the  year  1837  an  Act  of  Incorporation  was  obtained  for 
the  York  and  North  Midland  Eailway  Company.  The  pro- 
visional committee  at  once  resolved  themselves  into  a  Board  of 
Directors,  and  Mr.  Hudson  was  unanimously  elected  Chairman. 
Mr.  Hudson's  antecedent  efforts  now  began  visibly  to  tell  upon 
the  enterprise.    The  land  for  the  route  was  obtained  at  the 


14  TACTS,  FAILrKES,  AND  FEArCS. 

average  cost  of  £1750  per  mile — a  sum  less  by  several  thousand 
pounds  than  the  average  cost  per  mile  that  had  been  paid  by 
the  Korth  Midland,  with  which  the  York  line  was  designed  to 
effect  a  junction.  Mr.  Hudson's  powers  of  organization  were 
never  more  happily  brought  into  play  than  in  the  ease  and 
rapidity  with  which  all  the  preliminary  arrangements  for 
commencing  the  work  of  construction  were  brought  into 
action.  In  this,  as  in  other  combined  operations  with  which 
Mr.  Hudson  was  connected,  he  displayed  that  activity  which 
could  only  come  from  regarding  himself  as  a  joint  of  the 
great  machine ;  he  laboured  to  fill  up  his  individual  part  as 
assiduously  as  if  the  motion  of  every  wheel,  the  effect  of 
every  spring,  the  success  of  the  whole  operation,  depended 
upon  him  alone.  The  apathy  of  the  people  at  York,  in 
respect  to  the  enterprise,  had  been  far  more  difficult  to 
surmount  than  any  obstacle  that  now  presented  itself.  No- 
thing, however,  could  exceed  their  joyful  hilarity  and  festive 
mirth  when  the  first  sod  was  turned,  and  a  gang  of  Irish 
labourers  rushed  upon  the  sward  "  to  take  up  the  shovel." 
It  was  a  jubilee  for  every  citizen  of  York  of  sound  mind, 
tmanticipative  of  the  horrors  of  change.  With  the  same 
•view  to  economy  which  had  suggested  a  personal  examina- 
tion of  a  former  proposed  route,  Mr.  Hudson  superintended 
as  much  as  possible  the  construction  of  this  line,  and,  as  it 
approached  completion,  turned  his  attention  to  the  provision  of 
rolling  stock,  the  working  arrangements,  and  the  classification 
of  the  business  departments. 

It  was  not  so  early  in  the  history  of  railway  enter- 
prise, but  that  he  and  others  had  seen  the  tendency  of  such 
undertakings  to  mismanagement,  waste,  and  early  annihi- 
lation of  capital,  and  he  made  it  his  business  both  to  super- 
vise the  outlay  and  protect  future  resources.  Meanwhile, 
Mr.  Hudson  had  attained  to  the  dignity  of  Lord  Mayor 
of  York.     One  of  the  most  pleasiag  duties  devolving  upon 


TACTS,   FAJLUBES,    AXD    FBAUBS.  15 

him  in  the  year  of  his  mayoralty  was  the  inauguration  of 
the  York  and  North  Midland  Eailway.  The  occasion  was  a 
proud  and  memorable  one  to  those  who  had  brought  the 
enterprise  thus  far  towards  completion.  In  presence  of  a  large 
assembly,  Mr.  Hudson  dealt  with  dates,  figures,  and  facts 
relating  to  it,  and  dilated  with  unaccustomed  warmth  on  the 
prospective  advantages  of  the  work.  It  was  not  until  1840 
that  trains  begun  to  run  on  the  line.  At  the  close  of  Mi. 
Hudson's  ofificial  year,  which  had  thus  been  rendered  so  event- 
ful, his  fellow-citizens,  together  with  gentlemen  and  noblemen 
of  the  county,  presented  him  with  a  superb  testimonial,  ex- 
pressive of  their  esteem  and  regard,  not  only  for  the  honour- 
able discharge  of  his  civic  duties,  but  for  the  public  services  he 
had  rendered  in  commencing,  carrying  on,  and  bringing  to  a 
completion  the  York  and  North  Midland  line.  At  the  same 
time  that  this  line  was  put  in  operation,  the  Hull  and  Selby 
was  opened  throughout,  arriving  at  the  point  at  which  the 
Leeds  and  Selby  might  connect  with  it.  These  two  lines, 
however,  were  subsequently  acquired  by  the  York  and  North 
Midland.  Mr.  Hudson  had  no  sooner  secured  the  execution 
of  his  cherished  design  of  carrying  a  railroad  out  from  York 
to  the  most  advantageous  point  of  communication  with  exist- 
ing and  forming  lines,  than  he  applied  himself  to  project  under- 
takings which  might  conserve  this  'vantage  ground,  part  of  his 
plan  being  to  extend  the  existing  line  so  as  to  anticipate  the 
movements  of  other  companies. 

"W  ith  the  view  of  commanding  a  further  portion  of  trafBo 
to  be  drawn  from  the  north-western  districts  of  the  country,  he 
next  obtained  a  grant  of  money  for  the  survey  of  a  route  to 
Scarborough.  Parliament  at  this  time  was  by  no  means  back- 
ward in  authorizing  the  raising  of  capital  iar  beyond  the 
necessary  outlay — through  shares  or  loans — and  railway  com- 
panies had  already  found  that  they  could  derive  the  greatest 
gain,  and  therefore  had  the  greatest  interest  in  endeavouring 


IG  PACTS.   FAILrEES,   AKD    FEAUDS. 

to  bring  neighbouring  districts,  by  means  of  branches,  ex- 
tensions, or  amalgamations,  within  the  range  of  markets, 
through  funds  raised  on  the  credit  of  their  revenues,  which 
beyond  a  certain  amount  did  not  actually  belong  to  them,  if  the 
new  undertakings  would  not  of  themselves  prove  profitable 
investments-  The  desire  to  secure  large  sums  by  the  issue  of 
shares  at  high  premiums,  prevented  any  question  as  to  the 
adequacy  of  the  return,  or  as  to  whether  the  undertaking  itself 
would  pay,  which  was  the  only  criterion  which  could  be  safely 
trusted  in  the  employment  of  capital.  Parliament  certainly 
had  no  intention  to  give  power  to  proprietors  of  railways  to 
raise  large  sums  to  divide  among  themselves  ;  but,  under  the 
representations  made,  it  was  impossible  to  prevent  a  dispro- 
portionate amount  of  disposable  capital  flowing  into  new 
investments.  Sir  John  Eennie,  unskilled  in  those  financial 
movements  by  which  support  was  assured  to  an  undertaking, 
whether  it  returned  the  money  invested  in  it  or  not,  bad  failed 
in  establishing  a  line  between  York  and  Scarborough.  This 
much,  however,  had  to  be  said  in  favour  of  such  a  line :  It  lay 
in  the  direction  originally  proposed,  and,  as  Leeds  was  esta- 
blishing direct  communication  with  Hull,  it  was  not  unreason- 
able for  York  to  desire  communication  of  its  own  with  the 
western  coast.  Mr.  Hudson  saw  that,  in  one  form  or  other,  it 
would  be  of  benefit  to  the  York  and  North  Midland,  and  per- 
sonally accompanied  the  surveyors. 

As  for  the  York  and  North  Midland,  the  wisdom  of  the 
choice  made  as  to  route,  and  even  of  the  delay  that  had  occurred, 
was  soon  made  manifest.  Fed  by  the  traffic  of  lines  running 
southwardly  and  easterly  with  which  it  had  been  brought  at 
once  into  communication,  a  large  business  was  secured,  while 
the  reactionary  eff'ects  of  this  on  the  city  of  York  were  becoming 
every  day  more  apparent.  The  true  principles  of  mercantile 
science,  as  applied  to  railways,  had  not,  however,  yet  been  traced; 
it  was  not  discovered  that  in  this,  as  in  all  other  mercantile 


FACTS,    FJLILrEES,    AND    FEAUDS.  17 

speculations,  large  profits  -were  to  be  most  surely  attained  by  a 
large  trade  brought  into  existence  at  moderate  prices.  The 
attention  of  proprietors  was  absorbed,  not  in  fostering  the 
wish  to  travel,  and  aft'ording  facilities  for  the  constant  trans- 
port of  goods,  by  establishing  a  moderate  scale  of  fares,  but  in 
taking  advantage  of  every  opportunity  that  presented  itself  to 
thwart  one  another's  designs,  either  by  establishing  competing 
lines  or  raising  the  fares  on  one  portion  of  a  given  route,  so  as 
to  counteract  or  check  any  reduction  or  alteration  of  the  tariffs 
on  any  other  portion  under  the  control  of  a  different  com- 
pany. •  As  remarked  by  a  witness  before  the  Eailway  Acts' 
Amendment  Committee  of  the  House  of  Commons,  in  184i,  a 
period  subsequent  to  that  to  which  reference  is  now  made, 
"  the  passenger  from  London  to  York  did  not  know  at  what 
part  of  the  route  his  money  was  distributed.  The  last  fifty 
miles  might  cost  him  more  than  all  he  had  already  passed  over." 
"While  Mr.  Hudson  would  forego  no  advantage  that  could  be 
obtained  from  the  almost  unrestricted  powers  granted  by  Par- 
liament for  the  furtherance  of  railway  projects,  and  was 
ready  to  cope  at  all  points  with  railway  companies  in  the 
adjustment  of  the  scales  of  fares,  besides  looking  to  the  profits 
to  be  obtained  on  the  issue  of  shares  on  branches,  entitling 
the  holders  to  the  same  dividend  as  that  received  on  the  trunk- 
line,  although  these  branches  might  yield  a  far  less  per  centage, 
he  was  not  disposed  to  lose  sight  of  the  advantages  accruing 
from  working  the  York  and  North  Midland  at  the  cheaper 
cost,  which  improved  experience  and  skill  rendered  possible. 

The  doubtful  state  of  the  North  Midland  line,  as  compared 
with  that  over  which  Mr.  Hudson  so  efficiently  presided,  soon 
became  matter  of  observation.  While  the  traffic  on  the 
former  was  steadily  progressing,  expenses  were  increasing  in 
yet  greater  ratio.  It  was  no  easy  thing  to  manage  these  vast 
and  unwieldy  corporate  concerns  in  a  day  when  the  conse- 
quences to  follow  on  any  alteration  in  the  superintendence  were 

C 


•18  FACTS,   TAILrilES,   AND   FEArDS. 

far  from  being  apparent.  Mr.  Hudson,  who  was  a  sbareholder 
in  tbe  aS'ortli  Midland,  interested  himself  in  the  matter,  and 
offered,  after  a  brief  examination  of  the  state  of  its  affairs, 
to  put  the  company  on  a  quite  different  footing,  provided 
he  were  invested  with  sufficient  power  for  the  purpose. 
Mr.  Hudson  had  gained  the  ear  of  the  great  body  of  share- 
holders, by  declaring  that  the  expenses  could  be  reduced  fifty 
per  cent. ;  and  though  some  opposition  was  shown  to  such  a 
reform,  and  its  possibility  was  by  not  a  few  stoutly  denied, 
the  malcontents  were  outvoted,  Mr.  Hudson  was  installed  in 
power,  and  proceeded  to  make  good  his  promise.  He  removed 
needless  functionaries,  curtailed  various  emoluments,  and  vigi- 
lantly supervised  the  whole  outlay.  He  would  tolerate  neither 
incompetence  nor  indifference.  In  addition  to  seeing  that 
servants  and  officers  were  fairly  paid,  so  as  to  secure  greater 
efficiency  and  attention  on  the  part  of  agents,  and  renewing  all 
the  contracts  entered  into  for  supplies,  as  well  as  the  arrange- 
ments in  existence  with  otlier  companies,  he  succeeded  in 
introducing  greater  simplicity  and  unity  of  plan  in  its  opera- 
tions— minor  points,  hitherto  too  much  overlooked,  falling  into 
proper  system.  A  character  altogether  new  was  given  to  the 
management,  and  zeal  and  intelligence  exhibited  itself  on  the 
part  of  subordinates.  In  the  first  half-year  a  saving  was 
found  to  have  been  effected  in  the  working  expenses  alone  of 
nearly  twelve  thousand  pounds,  with  the  certainty  of  yet  fur- 
ther decrease. 

Thus  far  successful,  Mr.  Hudson  proceeded  to  fortify  the 
position  of  the  York  and  Korth  Midland,  by  averting,  as  far 
possible,  any  dangerous  rivalry.  It  had  become  an  object  of 
prime  importance  to  secure  the  Leeds  and  Selby  line,  which 
would  have  competed  with  the  Tork  and  JN'orth  Midland  for 
the  Leeds  and  Tork  traffic  ;  and  Mr.  Hudson,  as  soon  as  the 
opportunity  offered,  incurred  the  responsibility  of  taking  a 
lease  of  the  line.    The  lease  ran  for  thirty-one  years,  and  was 


TACTS,  FAILUnES,   AND  TIlArDS.  19 

secured  at  what  was  considered  au  equitable  rental.  The  ad- 
vantages of  this  acquisition  were  so  apparent  that  the  York 
and  iXorth  Midland  Company  at  once  adopted  the  bargain* 
releasing  Mr.  Hudson  from  his  assumed  obligation. 

Mr.  Hudson's  capacity  for  calculation,  which  enabled  him 
to  carry  in  his  head  the  items  constituting  the  aggregate  of 
the  vast  sums  in  which  he  dealt,  added  to  his  desire  to  have 
recorded  merely  the  results  of  his  transactions,  led  him  not 
only  to  suspend  entries  until  certain  successes  had  been 
achieved,  but  really  to  undervalue  the  importance  of  any  for- 
mal method.  AVhen  he  succeeded  to  the  Chairmanship  of 
the  J^orth  JMidland,  he  was  reported  to  have  scoffed  at  the 
systematic  manner  in  Avhich  the  accounts  were  kept,  and  to 
have  disposed  of  a  quantity  of  stationery — a  proceeding  which 
afterwards  gave  rise  to  the  following  satirical  remarks  in  a 
public  journal :  "  Good  accounts  are  troublesome  things  to 
keep,  and  occasionally  cause  trouble  to  the  parties  of  whose 
affairs  they  are  registers.  The  true  chandler's  shop  system 
is  to  keep  no  books  at  all.  A  cross  for  a  halfpenny,  a  down 
stroke  for  a  penny,  a  little  O  for  a  sixpence,  and  a  larger  for  a 
shilling,  all  in  chalk,  on  a  board  or  cupboard  door,  constitute 
the  accounts  of  many  a  money-getting  shopkeeper ;  and,  we 
doubt  not,  would  suit  well  the  purposes  of  some  of  the  rail- 
ways. Chalk  is  easily  rubbed  out  and  put  in  again ;  ink  is  a 
permanent  nuisance.  One  great  company  is  reported,  at  one 
time,  to  have  used  pencils  for  their  figures,  in  preference  to 
ink,  which,  we  presume,  must  have  been  for  the  sake  of  con- 
venience." 

To  do  Mr.  Hudson  justice,  however,  it  must  be  stated 
that  vouchers  appear  to  have  been  kept  of  all  the  transac- 
tions, and  though  the  entries  were  not  in  the  order  in  which 
they  arose,  means  were  afforded,  to  those  who  searched  the 
books,  of  checking  the  balance  of  the  debit  or  credit  of  current 
accounts,  and  thus  to  discover  how  far  the  accounts  had  been 


20  FACTS,   FAILUEES,   AKD   FKATJDS. 

tampered  with  in  order  to  strike  balances  corresponding  to 
half-yearly  statements.  Unquestionably  the  most  rigid  accu- 
racy in  the  entries  made  to  the  credit  or  debit  of  parties, 
or  heads  of  account,  was  essential  for  the  protection  of  the 
Company ;  and  no  full  apology  can  be  entered  for  his  negli- 
gence in  balancing  cash,  for  irregularities  as  to  dates,  names, 
sums,  and  heads  of  account.  His  word  was  allowed  to  gua- 
rantee every  thing.  All  was  assumed  to  be  properly  done 
that  had  passed  through  his  hands. 

Mr.  Hudson  having  purchased  the  Leeds  and  Selsby  Bail  way, 
the  North  Midland  Company  at  once  ratified  the  act,  releasing 
Mr.  Hudson  from  his  obligations.  Mr.  Hudson,  previously  to 
making  his  bargain  for  the  Leeds  and  Selsby  Eailway,  it  is 
alleged,  had  put  some  of  his  friends  to  the  secret  of  the  in- 
tended purchase,  who  instantly  bought  up  the  shares.  This 
fiudden  demand  caused  the  shares  to  rise  in  value  far  above 
their  former  level,  no  one  appearing  to  be  able  to  account  for 
the  enhancement.  On  the  purchase  of  the  line  being  made 
public,  the  individuals  thus  favoured,  who  happened  to  be 
proprietors  of  the  York  and  North  ]Midland,  Avere  enabled  to 
realize  a  double  gain,  and  thus  increase  their  financial 
position. 

"Whether  the  announced  receipts  of  the  York  and  North 
Midland  were  at  this  date  as  large  as  they  were  affirmed  to  be 
may  be  questioned ;  but  it  is  certain  that  the  advantages 
secured  to  immediate  shareholders,  from  Mr.  Hudson's  policy, 
in  the  way  of  large  bonuses  on  shares  issued  to  proprietors 
at  par,  and  of  high  dividends  that  were  guaranteed  on  each 
new  extension,  irrespective  of  its  actual  returns,  contributed 
largely  to  generate  that  wild  excitement  which  presently  took 
possession  of  the  public. 

In  September  of  1841,  the  lease  of  the  Great  North  of 
England  was  made  the  subject  of  a  conference  between  him- 
self and  the  representatives  of  six  railway  companies,  to  whom 


TACTS,   FJLILUHES,  AND   FBAUDS.  21 

lie  had  suggested  the  importance  of  the  connection.  The 
Bucceeding  October  an  agreement  was  come  to  between  these 
companies,  by  which  the  Great  North  of  England  Railway  was 
to  be  leased  for  ten  years,  and  shares  to  be  divided  among 
them  according  to  the  amount  they  severally  guaranteed.  On 
the  ISth  of  June,  1842,  the  companies  were  incorporated, 
under  the  name  of  the  Newcastle  and  Darlington,  for  the  pur- 
pose of  carrying  this  agreement  into  effect;  they  were 
authorized  by  the  same  Act  to  raise  by  shares  the  required 
amount  of  capital,  and  to  exercise  enlarged  borrowing  powers. 
One  of  the  minor  companies  declining  to  carry  out  its  agree- 
ment of  6  per  cent,  guarantee,  Mr.  Hudson  had  the  pleasure 
of  again  assuming  a  heavy  obligation  on  behalf  of  those 
companies  with  which  he  stood  associated.  In  pressing  for- 
ward the  work  to  completion,  he  exhibited  the  same  energy 
which  had  distinguished  him  in  relation  with  the  York 
and  North  Midland  Company.  Then  the  object  of  his  ambi- 
tion had  been  to  bring  York  into  close  communication  with 
London,  as  well  as  with  the  East  and  "West  Hiding ;  now 
it  waa  to  advance  northward — a  direction  that  had  stimulated 
the  ambition  and  enterprise  of  all  the  great  companies. 

The  practice  of  swelliug  the  nominal  amount  of  stocks 
beyond  actual  outlay,  continued,  on  all  hands,  to  be  persevered 
in.  In  the  Great  North  of  England  Eailway  Purchase  Bill, 
the  actual  outlay  and  estimate  for  additional  works  was 
£1,490,769,  the  proposed  capital  £4,000,000,  exceeding  the 
actual  outlay  and  engagements  of  the  Great  North  of  England 
proprietors  by  the  sum  of  £2,503,003.  At  the  time  of  the 
amalgamation,  the  Great  North  of  England  paid  but  small 
dividends.  As  afterwards  stated  by  Mr.  Hudson,  before  a 
committee  of  the  House  of  Commons,  it  was  stipulated  by  the 
Newcastle  and  Darlington  that  it  should  receive  10  per  cent. 
on  every  £50  share  till  a  stated  period,  when  the  shareholders 
had  a  claim  to  be  paid  off  in  4  per  cent,  stock  at  £250  per 


22  FACTS,   FATLUEES,    A^TD   FRAUDS. 

sliare.  From  50  to  100  per  cent,  was  realized  by  those  wlio 
luckily  were  in  the  secret  of  this  amalgamation,  and  such  was 
the  success  attending  the  operation,  that  the  proprietors'  gain 
was  estimated  at  cent,  per  cent.  The  stimulus  given  to  railway 
investments  by  returns  disproportionately  high,  by  an  artificial 
enlargement  of  profit  above  the  level  of  the  ordinary  returns 
on  capital,  enabled  proprietors  easily  to  enrich  themselves  afe 
the  expense  of  their  successors. 

Under  the  auspices  of  Mr.  Hudson,  an  amalgamation  was 
successively  effected  between  the  Midland  Counties,  North 
Midland,  Birmingham,  and  Derby  and  Bristol  and  Birmingham 
[Railways,  making  a  line  of  SOT-i-  miles,  with  126  passenger  and 
goods'  stations,  terminating  at  Bristol  in  junction  with  the 
Great  "Western  Eailway,  9^  miles  from  Birmingham,  at  Eugby, 
on  the  same  line,  82  miles  from  London,  at  Leeds,  Notting- 
ham, and  Lincoln,  and  passing  through  the  counties  of  War- 
wick, Stafford,  Derby,  Leicester,  Nottingham,  York,  Lincoln, 
Worcester,  Gloucester,  and  Somerset.  Tho  money  this  com- 
pany had  been  authorized  to  raise  on  share  capital  amounted 
to  £14,664,434,  and  by  loans  £2,680,389,  so  that  its  powers 
may  be  said  to  have  been  almost  unlimited. 

Whilst  the  Legislature  was  aiming  to  enforce  more  com- 
pletely those  restrictions  which  might  prevent  companies  from 
unduly  exercising  the  credit  they  possessed  and  maintaining 
exorbitant  charges,  Mr.  Hudson  entered  into  a  magnificent 
combination,  formed  by  several  leading  companies,  for  the  pur- 
pose of  effecting,  as  was  alleged,  more  economical  manage- 
ment, but  in  reality  to  maintain  excessive  exactions  in 
perpetuity.  To  sustain  this  scbeme,  railway  meetings  were 
almost  simultaneously  held  at  York,  Gainsborough,  and  Lin- 
coln. This  combination  was  described  at  the  time,  by  a  witness 
before  a  committee  of  the  House  of  Commons  which  was  then 
sitting,  as  subsisting  "between  the  London  and  Birmingham, 
Amalgamated  Midland,  the  York  and  North  Midland,  and  all 


FACTS,  FATLUBES,  A^TD  FEAUDS.  23 

the  lines  in  connection,  and  that  were  to  be  in  connection, 
north  of  York  to  Edinburgh,"  and  it  was  added,  that  "  the 
lines  from  York  to  Scarborough,  and  from  Leeds  to  Bradford, 
which  had  already  passed  the  House  were  part  of  it ;  "  also, 
that  "in  the  ensuing  session  of  Parliament,  powers  were  to  be 
sought  to  make  a  line  from  the  North  Midland,  near  Swinton, 
and  the  Midland  Counties  at  Nottingham,  to  meet  at  Lincoln 
and  another  line  from  a  point  north  of  Swinton,  to  a  point  on 
the  SheiEeld  and  Manchester  line,  called  Penmaton  IToor, 
which,  with  the  Sheffield  and  Manchester  line,  and  Sheffield 
and  Eotherham,  would  become  part  and  parcel  of  the  same 
interest. ' 

In  June  of  1841,  the  line  from  York  to  Newcastle  was 
opened.  By  untiring  energy,  financial  skill,  and  judicious  organ- 
ization, Mr.  Hudson,  with  others,  had  accomplished  a  result 
which  had  baffled  a  powerful  company,  possessed  of  sufficient 
powers  for  raising  money  for  the  purpose,  but  unable  to  take 
any  further  advantage  of  public  enthusiasm.  Mr.  Hudson 
was  naturally  proud  of  the  achievement,  and  the  ovations  paid 
him  on  the  occasion  showed  how  completely  to  his  exertions 
the  opening  of  the  line  throughout  was  attributable.  The 
congratulations  were  the  warmer  in  consequence  of  the  im- 
pression that  the  line,  once  completed,  was  a  safe  and  sure 
investment.  The  resources  of  the  Carlisle  and  Newcastle 
EaUway,  constructed  at  an  early  period  in  the  history  of  rail- 
way enterprise,  were  thus  effectually  drawn  upon,  and  a  vast 
area  of  country  was  thus  interlinked  by  rail  with  the  midland 
and  south-eastern  districts,  as  well  as  secured  by  the  aid  of 
various  tributary  branches. 

In  this  year,  IVIr.  Hudson  was  examined  before  a  committee 
of  the  House  of  Commons,  appointed,  under  a  motion  of  the 
President  of  the  Board  of  Trade,  to  consider  whether  any  and 
what  new  provisions  should  be  introduced  into  such  railway 
bills  as  might  come  before  the  House  during  that  or  future 


24  TACTS,   FAILUEES,   AXD   FEAUDS. 

sessions  for  the  advantage  of  the  public  and  the  improvement 
of  the  railway  system.  In  the  most  unaffected  manner,  and 
with  all  the  apparent  zeal  of  one  earnest  to  aid  to  the  great- 
est possible  extent  the  investigations  of  the  committee,  he 
developed  and  even  elaborated  the  specialities  of  those  trans- 
actions, by  vrhich  the  railway  companies  profited  at  the 
expense  of  the  public ;  how  they  escaped  Parliamentary  restric- 
tions and  furnished  themselves  with  the  means  for  extravagant 
speculation ;  how,  by  the  pledging  of  the  revenues  of  their 
lines  for  extensions  and  purchases,  sums  of  enormous  magni- 
tude were  immediately  put  into  the  pockets  of  shareholders ; 
in  fact,  Mr.  Hudson  showed  to  the  committee  at  whose  risk 
all  this  work  was  being  done,  and  left  them  to  draw  the 
inference  how  little  it  was  in  their  power  to  interfere 
with  the  course  that  things  had  taken.  And  when  the 
Oovernraent  of  the  day  conceived  itsel"  called  upon  to  guard, 
by  fresh  restrictions,  the  exercise  of  the  power  possessed 
by  railway  proprietors,  and  Mr.  Gladstone  had  propounded 
a  measure  by  which  the  excess  of  profits  above  10  per 
cent,  should  belong  to  the  public,  and  be  made  available 
to  the  improvement  of  the  lines  or  the  reduction  of  fares,  and 
various  regulations  were  laid  down  of  a  character  to  intimate 
how  completely  the  railway  interest  was  regarded  by  Govern- 
ment in  the  light  of  a  monopoly,  those  immediately  inte- 
rested undertook  to  resent  this  interference,  and  various 
meetings  were  held  in  different  parts  of  the  kingdom,  at  which 
the  course  adopted  received  the  most  unqualified  censure. 

At  one  of  these  meetings,  Mr.  Hudson  presided.  He  de- 
nounced the  bill  as  injurious  to  railroad  property,  prejudicial  to 
public  welfare,  and  conflicting  with  the  liberty  of  enterprise. 
Not  content  with  this,  he  penned  a  letter  to  Mr.  Gladstone, 
who  had  charge  of  the  bill,  pointing  out  its  demerits,  declaring, 
at  the  same  time,  its  utter  inadequacy  to  secure  the  object  in 
view.     The  gradual  ramifications  of  this  movement,  extending 


FACTS,   FATLUnES,   AKD   FRAUDS.  25 

to  every  town  and  district  in  England,  were  attended  with 
proportionate  power,  such  as  naturally  arose  from  large 
expenditure,  wide  patronage,  and  enormous  investment  of 
capital,  so  that  this  influence  was  fast  obtaining  an  ascen- 
dancy even  in  the  Legislature.  Although  there  was  a  wide- 
spread impression  that  the  public  were  not  benefited  as  they 
ought  to  have  been,  by  the  increasing  traffic,  in  the  reduction 
of  charges  and  the  provision  of  greater  conveniences  and 
facilities,  Mr.  Gladstone's  measure,  in  a  modified  form,  was 
passed  with  difficulty.  This  Act  gave  Parliament  the  right  to 
revise  the  tolls  ;  but  this  right  was  not  to  come  into  operation 
till  after  the  lapse  of  twenty  years,  and  then  it  could  only  be 
exercised  on  permanently  guaranteeing  to  the  shareholders 
the  enormous  dividend  of  10  per  cent. 

Mr.  Hudson  knew  well  how  to  make  steady,  gradual,  and 
permanent  encroachments,  so  as  to  compel  others  to  concede 
to  him  the  absolute  influence  necessary  for  that  free  individual 
action  on  which  he  felt  the  very  existence  of  the  organizations 
he  brought  about,  and  the  success  of  the  negotiations  into 
which  he  entered,  depended.  He  further  knew  how  to  make 
"capital"  out  of  the  feelings  of  reverence  and  admiration  he 
excited.  Having  entered  into  some  arrangements  for  the 
Midland  Company  which  he  had  not  vouchsafed  to  disclose  to 
the  Board  of  Directors,  these  gentlemen,  after  having  vainly 
attempted  to  worm  out  the  coveted  secret,  screwed  up  their 
courage  one  day  to  demand  it.  They  accordingly  met  much 
earlier  than  usual,  and  when  their  superior  arrived,  they  were 
all  exceedingly  quiet.  "  How,  now,  gentlemen,"  said  Mr. 
Hudson,  "  has  anything  happened  ?"  *'  Only,"  replied  one, 
"  that  we  being  equally  responsible  with  yourself  for  what  is 
done,  are  desirous  of  knowing  the  nature  of  your  future  plans," 
"  You  are,  are  you  ?"  rejoined  the  railway  monarch,  "  then 
you  will  not !"  And  the  business  of  the  board  proceeded. 

Mr.  Hudson  was   next  found  engaging  in  a  transaction 


26'  TACTS,   TAILUEES,   X2^J)    FEAUDS. 

highly  illustrative  of  his  character  and  his  policy.  In  nego- 
tiating for  the  Newcastle  and  Darlington  line,  he  had  outwitted 
the  Dean  and  Chapter  of  Durham,  showing  the  vanity  of  the 
idea  that  the  "Church  and  State"  could  interpose  to  stay 
these  great  industrial  undertakings.  He  now  again  visited 
that  ancient  archiepiscopal  see,  in  company  with  George 
Stephenson,  for  the  purpose  of  outwitting  the  shareholders  of 
the  Durham  junction,  by  buying  up  the  railway  between  them. 
Great  was  the  astonishment  of  the  public  when  they  came  to 
learn  the  particulars  of  the  affair.  A  railway  put  into  the 
breeches  pocket  of  an  engineer  and  director !  The  proprie- 
tary did  not  so  slowly  recover  from  their  surprise.  ]\Ir. 
Hudson  by  this  purchase,  which  he  handed  over  to  the  com- 
pany, had  gained  a  further  step  on  the  new  highway  to  the 
north,  a  further  security  for  carrying  out  unchecked  all  his 
plans,  and  sustaining  without  impediment  the  whole  fabric  of 
his  power. 

In  glancing  on  a  railway  map  of  England,  the  eye  is  at 
once  arrested  by  the  bold  line  of  railway  projected  from  New- 
castle to  Berwick,  and  which,  unsupported  on  its  way  by  any 
other  branch  than  that  from  North  Shields  to  Morpeth,  follows 
the  eastern  coast,  giving  a  northerly  connection  to  the  midland 
and  south-eastern  lines  of  railway  to  a  point  a  few  miles  east- 
ward of  Edinburgh.  When  this  line  was  projected,  Mr. 
Hudson  at  once  realized  its  importance,  and  subscribed,  on 
his  own  responsibihty,  for  2000  shares  at  £25  each.  These 
shares  almost  immediately  rose  to  £30  premium ;  but  he 
handed  them  all  over  to  the  York  and  North  Midland.  Self- 
sacrificing  as  this  act  may  appear,  it  is  sufficiently  set  off  by 
an  acquisition  made  by  him  when  elected  Chairman  of  the 
Newcastle  and  Berwick  line. 

On  the  Newcastle  and  Berwick  Railway  Company  amalga- 
mating with  the  Newcastle  and  North  Shields  Eailway  Com- 
pany, Mr.  Hudson  increased  the  authorized  issue  of  transfer- 


TACTS,  rJOLLUBES,   XSD  FBAITDS.  27 

able  sTiares  on  subscription  capital  of  a  million  and  a-balf 
pounds,  from  42,000  to  56,000.  As  he  deferred  making  any 
record  of  this  additional  issue  in  the  register,  the  act  escaped 
the  notice  of  shareholders  until  a  committee  of  investigation, 
years  after,  had  called  attention  to  it.  The  number  of  shares 
appropriated  by  Mr.  Hudson  was  9956^,  and  the  profits 
realized  on  the  several  operations  attending  their  sale,  must 
have  amounted  to  £145,704,  if  the  sales  were  realized  at 
market  prices.  A  transaction  of  almost  similar  character 
took  place  in  connection  vrith  York  and  Newcastle  Extension 
shares — an  issue  made  by  Mr.  Hudson  and  his  brother 
directors  in  advance  of  Parliamentary  authority,  and  out  of 
which  Mr.  Hudson  appropriated  to  himself  590  shares- 
The  aggregate  premium  on  these  amounted  to  £4000.  Al- 
though Mr.  Hudson  paid  neither  deposit  nor  calls  on  200  of 
these  shares,  the  parties  to  whom  he  gave  or  sold  them  received 
dividends  out  of  the  funds  of  the  company  as  regularly  as  if 
the  calls  had  been  duly  met ;  and  whilst  Mr.  Hudson  was  in- 
dulging in  this  distribution — possibly  in  favour  of  what  he 
conceived  to  be  the  interest  of  the  company,  but,  as  alleged  by 
a  subsequent  committee  of  investigation,  for  his  o^vn  benefit — 
9G82  unappropriated  shares  were  held  by  the  company,  which 
might  have  yielded  a  profit  of  £100,000,  but  no  sales  of  these  . 
were  eifected. 

The  low  price  of  iron  in  the  winter  of  1844  had  induced 
Mr.  Hudson,  in  anticipation  of  the  extraordinary  demand 
which  he  foresaw  would  arise  from  the  demand  for  new,  and 
the  extension  of  old,  lines,  to  iirge  on  his  colleagues  of  the 
York,  Newcastle,  and  Berwick  Company  the  immediate 
purchase  of  10,000  tons  to  supply  their  anticipated  wants. 
Fearful  of  incurring  the  responsibility,  they  declined  to 
authorize  the  purchase,  and  Mr.  Hudson  entered  into  a  con- 
tract on  his  own  account  for  the  10,000  tons.  Kesults  con- 
firmed his  anticipations.    In  1845,  iron  had  risen  cent,  per 


28  TACTS,  rAimiiES,  a^b  frauds. 

cent.,  owing  to  tlie  demand  for  new,  and  the  extension  of  old 
lines.  In  the  ensuing  January,  when  iron  had  risen  so 
enormously,  the  company  were  compelled  to  advertise  for 
20,000  tons ;  and  a  contract  was  concluded  with  the  same 
parties  with  which  Mr.  Hudson  had  made  his  bargain.  Mr. 
Hudson  furnished,  out  of  his  own  contract  supply,  7000  of  the 
20,000  tons  required,  realizing  a  large  profit,  which  he  was  how- 
ever subsequently  called  on  to  refund. 

It  was  calculated  that  the  total  revenue  of  railways  in 
some  twenty  or  thirty  years  would  amount  to  a  large  propor- 
tion of  the  interest  on  the  national  debt,  or  £28,000,000.  A 
host  of  schemes,  mature  and  immature,  practicable  and  imprac- 
ticable, profitable  and  profitless,  came  before  Parliament.  Capi- 
tal was  attracted  from  all  other  channels  of  enterprise.  The 
number  of  miles  for  which  Railway  Acts  were  passed  in  the 
first  session  of  the  Legislature  during  the  reign  of  this  new -bom 
enthusiasm  were  2841.  Mr.  Hudson  was  then  resorted  to  by 
various  companies  to  give  value  to  their  shares  by  appending 
liis  name  as  chairman,  or  affording  the  benefit  of  his  sage 
counsel.  He  boasted  afterwards  that  he  had  joined  no  com- 
pany whose  projects  were  not  meant  to  be  carried  out,  which 
■was  no  slight  merit  when  the  number  of  abortive  and  visionary 
schemes  of  the  time  are  called  to  remembrance.  Whether  the 
lines  he  paternally  adopted  were  open  for  traflic,  in  course  of 
being  constructed,  or  merely  projected,  his  name  gave  confi- 
dence to  holders  of  shares,  and  thus  carried  prices  to  a 
high  premium,  at  which  they  found  ready  and  eager  purchasers. 
Whatever  the  company,  a  rise  in  the  value  of  shares  was  ob- 
served unfailingly  to  follow  George  Hudson's  accession,  as 
though  he  was  in  possession  of  some  secret  talisman.  If  rail- 
ways were  already  embarrassed  and  discouraged  by  every 
legitimate  interest,  this  fact  only  served  to  add  fuel  to  the 
flame.  Hudson's  credit  was  so  great,  that  his  mere  word  ap- 
peared to  supply  the  place  of  actual  resources.     He  well  knew 


TACTS,    FAILURES,   AXD   TBAUDS.  29 

what  he  was  worth  in  this  respect ;  and  with  a  close  eye  and  a 
practised  hand,  he  weighed  tlie  ever  available  fund  represented 
by  his  reputation,  against  all  it  would  bear  of  unchecked  re- 
sponsibility, license,  and  latitude. 

Among  the  companies  who  sought  and  obtained  the  benefit 
of  Mr.  Hudson's  financial  skill  and  practical  knowledge,  as 
applied  to  railway  management,  was  the  Eastern  Counties. 
To  be  chairman  of  a  company  whose  line  extended  217^  miles, 
and  was  in  junction  with  the  Eastern  Union,  the  Norfolk, 
and  several  other  important  and  influential  railways,  which 
commanded  more  goods'  traflfic,  in  proportion  to  passenger  traf- 
fic, than  any  other  of  the  metropolitan  lines,  and,  though  at  the 
time  in  uuprosperous  circumstances,  anticipated  an  enormous 
traflSc  in  coals,  to  be  received  by  the  Blackwall  line,  and 
disposed  of  in  the  counties  of  Essex,  Herts,  and  the  eastern 
suburbs  of  the  metropolis,  was  an  oifer  particularly  imposing  to 
Hudson,  who  might  have  fairly  anticipated  that  his  name 
would  keep  the  shares  buoyant  till  such  time  as  the  develop- 
ment of  available  resources  had  realized  present  anticipations, 
or  further  amalgamation  of  lines,  had  afforded  the  means  of 
securing  the  greatest  amount  of  traflSc. 

In  accepting  the  chairmanship,  Mr.  Hudson  committed 
himself,  in  the  way  of  active  management,  to  an  Herculean 
task,  and  placed  himself  amidst  directors  who  had  fairly- 
exhausted  their  imaginations  in  devising  schemes  by  which 
the  company  might  maintain  itself.  Some  idea  may  be  formed 
of  the  gigantic  powers  with  which  it  was  invested,  from  the 
fact  that  it  had  been  authorized  to  raise  by  shares  nearly  nine 
million  pounds  sterling,  and  by  loans  and  mortgages  nearly 
three  million  pounds  sterling,  at  the  time  that  Mr.  Hudson 
joined  it.  A  large  proportion  of  its  shares,  however,  had  been 
issued  at  a  heavy  discount,  and  loans,  authorized  by  various 
Acts,  had  been  converted  into  capital.  The  directors  thought 
to  themselves,  how  different  the    situation  of  the  Eastern 


30  TACTS,   FAILUKES,   A>'D   FEArDS. 

Counties  would  have  been,  had  Mr.  Hudson  only  been  called 
to  the  helm  some  years  before.  As  it  was,  they  hailed  with 
rapture  his  accession  to  power,  and,  in  dependence  on  his 
energy,  sagacity,  foresight,  and  business  tact,  were  as  hopeful 
.as  men  could  be  of  the  results.  But  the  bargain  was  not  yet 
completed.  Mr.  Hudson  had  stipulated  for  more  than  they 
had  anticipated.  In  this  difficult  navigation  he  had  not  mis- 
calculated the  breadth  of  the  channel,  and  desired,  at  least, 
that  the  way  should  be  clear  of  ail  artificial  obstacles. 

Hudson's  first  act,  on  assuming  the  office  of  Chairman  of 
the  Eastern  Counties,  was  to  take  upon  himself  the  control  of 
the  financial  department.  At  one  of  the  earliest  meetings  of 
the  directors,  he  stipulated  further  that  Mr.  AVaddington 
should  supersede  Mr,  Crosbie,  of  Liverpool,  as  deputy-chair- 
man. Mr.  Crosbie  had  long  exerted  himself,  both  personally 
and  in  his  official  position,  to  forward  the  interests  of  the  com- 
pany, and  the  demand  occasioned  some  murmuring  at  the  board. 
The  members,  however,  were  quite  willing  to  make  any  sacrifice 
at  the  dictation  of  Mr.  Hudson,  and  had  not  Mr.  Crosbie  him- 
self opposed  this  summary  ejection,  the  motion,  in  all  likelihood, 
would  have  passed  without  much  comment.  On  Mr.  Crosbie 
refusing  to  relinquish  the  office  to  which  he  had  been  elected, 
Mr.  Hudson  jumped  up  before  the  fire,  saying,  in  a  com- 
posed tone,  "  Very  well,  I  am  brought  in  by  the  universal 
voice  of  the  shareholders ;  and  if  I  can't  have  my  own  deputy- 
chairman,  I  shall  return  home,  and  leave  the  company."  The 
other  members  of  the  board,  seeing  the  storm  that  was  brew- 
ing, interfered,  and  besought  the  belligerents  to  go  into  another 
room,  and  try  if  they  could  not  come  to  an  arrangement. 
They  did  so,  and,  in  a  few  minutes  after,  they  all  returned 
smiling.  Mr.  Hudson,  as  the  story  goes,  placed  Mr. 
"Waddington  in  the  post  he  had  assigned  to  him,  and  Mr. 
Crosbie  afterwards  scarcely  ever  troubled  the  board  with  his 
presence. 


FACTS,   FAILURES,   AJTD    FBAUDS.  81 

"WTien  Mr.  Hudson  had  been  but  a  few  months  in  pos- 
session, and  before  the  half-yearly  accounts  were  made  up,  he 
directed  that  nine  shillings  per  share  should  be  declared  at 
the  next  half-yearly  meeting  of  shareholders.  This  was 
accordingly  done,  and  shareholders  were  left  to  congratulate 
one  another  on  such  a  brace  of  excellent  directors  as  Mr.  Hud- 
son and  his  deputy-chairman.  Alterations  of  accounts  once 
commenced  were  continued.  The  course  with  reference  to  pub- 
lished statements  as  to  revenue  was  for  the  accoimts,  after  being 
made  up  from  the  books,  to  be  given  to  Mr.  Hudson,  who  in- 
structed Mr.  Waddington  to  intimate  that  certain  items  should 
be  altered.  JVIr.  AVaddington,  in  handing  back  the  figures,  and 
giving  the  directions  to  the  traffic  manager,  would  say,  "  Now 
mind,  ]\Ir.  Mosely,  I  shall  be  no  party  to  the  cooking  of  these 
accounts."  Mr.  "Waddiugton  by  his  very  words  condemned  him- 
self. Both  he  and  jNIr.  Hudson  would  seem  to  have  drawn  a 
distinction  between  corporate  and  individual  responsibility  ; 
acts  which  they  would  have  scorned  even  to  countenance  in 
their  own  private  spheres  of  business,  they  unhesitatingly  com- 
mitted when  within  the  charmed  circle  of  a  large  and  powerful 
organization,  for  the  purpose  of  furthering  general  and  indi- 
vidual interests.  Mr.  Hudson  stated,  at  a  subsequent  time, 
that  he  felt  the  company  was  justified  in  putting  a  certain 
amount  to  capital,  and  leaving  it  to  be  discharged  on  future 
years  of  success.  The  transactions  in  question  were  regarded 
as  mere  tTansfers  of  debt  from  one  period  to  another,  deter- 
mined by  his  own  judgment,  acting  in  reference  to  present 
requirements  and  future  anticipations,  and,  probably,  as  involv- 
ing very  little,  if  any,  culpability. 

The  dividend  announced  to  shareholders  at  the  last  half- 
yearly  meeting  of  the  Eastern  Counties  had  been  but  three 
shillings  a  share.  Now  great  things  were  expected  from  Mr. 
Hudson.  His  name  was  supposed  to  act  as  a  talisman  on 
whatever  he  came  near ;  but  apply  it  as  he  would,  it  stood  to 


32  FACTS,   FAILUBES,    AND    PEAUDS. 

reason  that  it  could  not  immediately  augment  the  traflSc 
receipts.  He  might  enter  into  advantageous  arrangements  for 
the  future,  but  to  act  at  once  and  independently  on  the 
resources  of  the  route  was  out  of  his  power.  Mr.  Hudson, 
however,  did  not  choose  to  stand  on  the  reason  of  the  thing. 
He  was  concerned  for  the  shareholders,  and  thought  it  a  kind- 
ness on  his  own  part  to  put  them  at  their  ease.  He  might 
thus  hope,  also,  to  gain  their  further  confidence,  with  a  view  to 
being  allowed  that  arbitrary  and  free  action,  and  absence  of  all 
control,  which  were  essential  to  the  fuU  play  of  his  faculties, 
and  the  ultimate  development  of  his  plans. 

At  a  special  meeting  of  directors  and  shareholders,  Mr. 
Hudson  informed  them  that  he  was  now  sufficiently  acquainted 
with  the  position  of  the  company  to  feel  confident  in  assuring 
them  that  there  was  no  line  in  the  kingdom  which  would  yield 
a  better  dividend  than  the  Eastern  Counties  ;  that  it  would  be 
one  of  the  best  means  of  investment  identified  with  the  rail- 
way system  of  this  country.  The  favourable  opinion  of  Mr. 
Hudson  was  a  sufficient  pledge  of  promise  to  the  enraptured 
shareholders.  The  usual  decorum  of  a  business  meeting  was 
set  aside,  and  the  prophet  of  the  iron-road  system  was  greeted 
with  demonstrations  described  by  a  contemporary  to  be  "  not 
unlike  the  ovation  tendered  by  the  friends  of  some  successful 
candidate  for  Parliamentary  honours."  Indeed,  the  proceedings 
were  of  the  most  tumultuous  character,  and  the  railway 
Napoleon,  as  he  was  then  popularly  called,  received  the 
plaudits  of  his  flatterers  with  the  most  regal  dignity.  So 
•complete  was  the  reliance  on  Mr.  Hudson's  management,  that 
no  astonishment  was  exhibited  when,  shortly  after,  three  times 
the  usual  amount  of  dividend  came  to  be  declared. 

The  loose  way  in  which  the  books  were  kept  would  ap- 
pear to  have  led  the  clerks  of  the  company  into  a  state  of 
unenviable  bewilderment.  Where  no  rigid  economy  was  re- 
quired as    respected  a  fluctuating    balance ;    where   entries 


TACTS,    rAlLTJUES,    AND   mAUDS.  88 

were  made  to  the  credit  or  debit  of  heads  of  account,  as  the 
case  might  be,  for  securing  mominal  aggregate  sums  to  bear 
out  half-yearly  statements ;  where  the  premiums  realized  ou 
certain  shares  were  carried  to  income,  and  the  ascertained  loss 
on  other  shares  was  carried  to  works ;  where  passenger  and 
merchandise  account  were  continually  overstated,  and  entries 
were  not  made  in  the  order  in  which  they  arose — it  could 
scarcely  be  otherwise  than  that  sums  actually  due  to  the  com- 
pany were  undesignedly  overlooked,  more  especially  as  "  con- 
struction" and  "  sundries"  accounts  were  made  the  chief  de- 
posits of  fictitious  entries.  Thus  £11,450  slipped  at  one  time 
through  the  prepared  sieve  in  the  way  of  over-payments — a 
most  natural  result  of  crediting  and  debiting  false  amounts. 
Not  to  speak  of  other  instances,  the  Selby  and  Bridlington 
lines,  undertaken  by  the  York  and  North  Midland,  at  Mr. 
Hudson's  suggestion,  and  indeed  under  his  decree,  occasioned 
an  annual  loss  of  £17,000.  This  loss  was  unquestionably  in- 
curred not  merely  in  eagerness  to  distance  rivals  and  to  ex- 
clude the  public  from  low  fares,  but  to  throw  upon  the  market, 
during  the  palmy  days  of  railway  speculation,  a  number  of 
shares  which,  imder  the  large  guarantee  afibrded,  though  no 
profits  were  ever  to  be  realized,  brought  high  premiums.  Even 
in  amalgamations  high  dividends  were  guaranteed  where  little 
or  no  profit  had  ever  been  secured,  thus  enabling  parties  to 
buy  up  beforehand  discredited  securities,  which  they  sold  in  a 
month  or  two,  sometimes  at  a  profit  of  cent,  per  cent.,  or  even 
greater,  and  fortunate  were  those  individuals  who  were  con- 
sidered to  range  behind  the  scenes,  and  who,  anticipating  the 
announcement  of  lease  or  new  arrangement,  operated  in  ad- 
vance of  their  neighbours. 

Three  years  from  the  time  Mr.  Hudson  assumed  the  reins 
of  power  ou  the  Eastern  Counties  line,  as  much  as  £294,000 
had  been  unduly  charged,  during  his  regime,  to  capital  account. 
Shareholders,  unaware  of  the  obligations  they  were  incurring — 

D 


3-1  TACTS,    PATLUEES,   A^TD    PKAUDS, 

obligations  that,  tbrough  one  transaction  and  another,  presently 
reached  half  a  million  pounds  sterling — were  lulled,  by  the 
transfer  of  figures,  into  a  delightful  slumber.  The  prosperous 
condition  of  the  10  per  cent,  dividend  line  was  a  universal 
subject  of  remark.  But  how  stood  matters  ?  Out  of  £545,714 
distributed  in  dividends,  from  the  4th  of  January,  1845,  to  the 
4th  of  July,  1848,  £320,572  was  procured  by  the  alteration 
of  traffic  accounts  and  improper  charges  to  capital.  Con- 
sequently, out  of  £545,714  actually  divided,  only  £225,141 
was  the  amount  that  in  reality  had  been  earned. 

On  the  creation  of  50,000  new  shares  by  the  York,  New- 
castle, and  Berwick  Company,  for  the  East  and  W^st  Hi  ding 
the  directors  of  the  company  appear  to  have  regarded  ib  as 
entirely  optional  with  themselves,  and  without  strict  reference 
to  the  interest  of  the  shareholders,  how  these  were  distributed. 
Accordingly  a  number  were  appropriated  to  themselves,  and 
several  thousands  fell  to  the  lot  of  Mr.  Hudson,  who,  on  these 
occasions,  always  of  course  came  in  for  the  lion's  share.  The 
premium  received  by  hirn  on  2300  of  these  Avas  £16,000,  an 
amount  which  he  subsequently  placed  to  the  company's  credit ; 
975  were  disposed  of  to  secure  the  interest  of  individuals,  and 
the  remaining  1100  were  appropriated  to  himself. 

The  exhibition  of  anything  like  high  moral  sentiment  in 
one  with  whose  name  is  associated — rightly  or  wrongly — so 
much  of  deception  and  illusion,  carried  on,  however,  for  the 
most  part,  with  the  apparent  desire  to  benefit  the  coin2)anies 
with  which  he  was  connected,  cannot  fail  to  interest  even 
in  retrospect.  To  many  persons,  indeed,  who  regard  a  bene- 
volent appreciation  of  worth  as  lifting  a  man  nearly  to  the 
summit  of  every  excellence,  and  as  well  nigh  atoning  for  every 
error,  George  Hudson  must  be  viewed  ia  a  highly  enviable 
light.  The  occasion  was  the  death  of  Stephenson — 
"  The  foremost  man  of  all  this  world," 

in  laying  the  foundations  of  the  railway  system.     A  few  days 


FACTS,  TAILUEES,  A3TD   TIUUDS.  39 

after  that  event,  Mr.  Hudson,  addressing  the  shareholdera  of 
the  Eastern  Counties  Eailway,  said : — 

"  But  for  my  anxiety  to  meet  you  to-day,  gentlemen,  ifc 
would  have  been  my  mournful  duty  to  pay  the  tribute  due  to 
departed  worth,  in  following  to  the  tomb  the  remains  of  my 
respected  friend,  Mr.  George  Stephenson ;  a  man  whose 
genius  has  benefited,  not  the  rich  only,  but  the  poor  also,  in 
opening  up  the  means  of  obtaining  cheap  fuel  and  locomotive 
facilities ;  a  man  who  deserves — if  any  one  may — the  title  of 
being  a  benefactor  of  his  species.  The  departure  of  such  a 
man  is  to  be  deplored  as  a  national  calamity ;  and  railway 
shareholders  have  a  special  cause  of  regret,  for  if  it  had  pleased 
God  to  spare  him,  as  we  might  have  hoped,  no  one  could  have 
been  more  pleased  than  himself  to  see  them  receive  a  due 
return  for  the  investment  of  their  capital  in  those  great  under- 
takings which  his  genius  and  enterprise  did  so  much  to  call 
into  existence." 

And  at  a  meeting  of  the  Midland  Bailway,  held  the  19th  of 
August,  1848,  Mr.  Hudson  remarked : — 

"  This  was  almost  the  first  meeting  of  their  proprietors  at 
which  they  had  not  had  the  presence  of  him  whom  history 
would  record  as  a  great  and  distinguished  man,  and  who  had 
so  lately  been  called  to  the  tomb  of  his  fathers.  They  had 
almost  always  had  his  friend  Mr.  Stephenson  present  to 
witness  their  proceedings,  and  to  testify  to  the  interest  he 
felt  in  their  undertaking.  But  it  had  pleased  God  to  deprive 
them  of  him  at  a  time  when  his  friends  looked  forward  to  havo 
the  pleasure  of  his  society  for  many  years.  They  must  all 
feel  that  it  was  a  great  alleviation  to  the  affliction  of  his  sor- 
rowing friends,  that  he  had  left  behind  him  a  memory  that 
princes  might  be  proud  of,  and  that  the  most  distinguished 
man  living  would  be  proud  to  exchange  his  fame  for  that 
which  would  surround  the  name  of  George  Stephenson.  He 
had  left  behind  him  the  character  of  an  honest  man;  of  a 


36  FACTS,   FAILUKES,   AJ»"D   rEAUDS, 

sincere  and  •w-armly-attached  friend ;  of  an  affectionate  bus- 
band  and  kind  father.  He  could  not  close  the  present 
meeting  without  expressing  the  deep  sympathy  which  he  was 
sure  they  must  all  feel  with  the  friends  of  the  deceased  for 
the  bereavement  they  were  suffering,  and  their  sense  of  the 
high  estimation  in  which  his  character  and  works  would  live  In 
after  ages  In  the  memory  of  his  countrymen.  He  trusted 
they  would  all  emulate  the  character  which  his  friend  had 
bequeathed  to  those  who  were  following  him." 

The  ease  with  which  Mr.  Hudson  harmonized  the  topics  of 
his  theme,  and  the  energy  and  conscious  power  with  which,  in 
simple  and  unstudied  diction,  he  gave  forth  his  utterances,  and 
which  had  their  response  In  the  fluctuating  emotions  of  a 
great  and  agitated  assembly,  were  finely  Illustrated  on  this 
occasion,  on  which  he  so  well  acquitted  himself  of  the  impor- 
tant task  of  testifying  to  the  virtues  of  one  who  occupied  a 
sphere  only  superior  to  his  own. 

Mr.  Hudson's  acquisition  of  the  Brandling  Junction,  on 
behalf  of  the  Newcastle  and  Darlington  Eallway,  was  rewarded 
by  the  directors  with  the  dotation  of  an  unappropriated  sur- 
plus of  2000  shares,  remaining  out  of  the  22,000  shares  which 
bad  been  issued  on  the  transaction.  Those  shares,  at  the 
ruling  market  price,  would  have  enabled  Mr.  Hudson  to 
realize  upon  them  £37,000  ;  whilst  the  shares  received  by  him 
as  his  proportion  in  the  general  distribution,  would  bring  up 
this  amount  to  £42,000.  No  man  had  less  reason  to  com- 
plain than  Mr.  Hudson  of  not  having  bis  services  most  fully 
appreciated.  Although  these  rewards  incurred  subsequently 
the  severest  censures  of  committees  of  investigation,  and 
Mr.  Hudson  was  caUed  upon  to  refund  large  sums  of  money 
on  account  of  them,  no  misgiving  at  the  time  came  to  lessen 
the  enthusiasm  of  the  givers  or  the  gratification  of  the 
receiver. 

Future  shareholders  had  not  much  cause  to  rejoice  in  sucb 


TACTS,  FAILVBES,   A3TD  FBA17DS.  37 

acquisitions  as  were  made,  notwithstanding  the  specious  argu- 
ment that  it  was  the  same  thing  to  pay  large  dividends  on 
small  capitals,  or  small  dividends  on  large  capitals.  If  the 
rate  of  dividend  was  to  determine  whether  the  scale  of  fares 
should  be  subjected  to  revision  by  the  Government  on  behalf 
of  the  public,  it  was  of  the  very  first  consequence  that  capitals 
should  correspond  with  the  original  outlay.  It  was  the  same 
thing  only  to  permanent  proprietors  whether  they  obtained 
large  bonuses,  and  increased  their  capitals  by  sums  exceeding 
the  money  laid  out  on  the  roads  by  the  amount  of  such 
bonuses,  and  received  proportionably  smaller  dividends.* 

There  would  appear  to  exist  undoubted  evidence  that  in 
the  York  and  North  Midland  accounts,  even  previous  to  1845, 
large  sums  were  improperly  charged  to  capital ;  so  that  many 
persons  conclude  that  in  the  earliest  stages  of  the  enterprise 
with  which  George  Hudson  was  connected,  the  value  of  shares 
and  the  amount  of  dividends  allotted  were  not  estimated  ac- 
cording to  actual  receipts.  Under  the  representations  that 
were  made,  the  acquisitions  of  permanent  holders  of  shares, 
from  the  date  of  the  construction  of  that  line  to  1846,  amounted 
to  five  times  the  original  outlay.  Whilst  the  shares  that  had 
been  issued  merely  reached  the  sum  of  £1,500,000,  the  pre- 
miums on  this  amounted  to  no  less  than  £7,500,000.  No 
wonder  this  amount  was  regarded  as  a  marvellous  trophy  to 
the  financial  genius  of  Mr.  Hudson !  No  wonder  that  h© 
was  sought  after,  courted,  admired,  and  adored!  The  pre- 
miums so  received  were  the  considerations  paid  for  suc- 
cessive transfers  of  the  excess  of  revenue  of  the  York 
and  North  Midland,  beyond  the  dividend  applied  to  the  new 

•  Curiously  enough  at  the  time  of  these  transactions  every  one  was 
seeking  to  benefit  by  his  advice,  and  in  the  great  rage  for  share  dealing  it 
is  believed  he  assisted  many  of  his  friends  to  recruit  their  resources  through 
his  information.  \Vlien,  however,  ho  was  displaced  from  power  several  of 
these  were  the  firat  to  stigmatize  his  conduct.     Hie  tramiit  gloria  mundi. 


83  TACTS,    rAILUEES,   A>'D   FEArDS. 

lines ;  this  revenue  being  diniinislied  exactly  in  the  ratio  in 
which  the  revenue  of  the  new  lines  fell  short  of  the  guaranteed 
dividends  which  were  to  be  derived  from  them. 

The  growing  importance  of  the  railway  interest ;  the  ex- 
tent to  which  the  Legislature  had  gone  in  interfering  with, 
under  the  attempt  to  regulate,  it ;  the  uncertainty  that  existed 
as  to  the  future  bearings  of  this  power  on  subsisting  industrial 
interests — rendered  it  necessary  that  it  should  have  its  own 
especial  representatives  within  the  House  of  Commons.  Mr. 
Hudson  was  elected  by  the  people  of  Sunderland,  who  had  in 
view  the  advantages  conferred  on  that  town  by  the  line  of  rail 
which  now  binds  them  mth  the  South,  as  well  as  with  the 
Midland  and  Eastern  districts  of  England,  and  with  which  Mr. 
Hudson  was  iudentified,  as  well  as  the  future  benefits  they 
expected  to  derive  from  his  management.  On  entering  the 
house,  Mr.  Hudson  at  once  sided  with  the  then  ministerialists. 
The  chief  of  the  railway  system  was  regarded  as  a  valuable 
acquisition  by  Sir  Eobert  Peel  and  his  party.  When  Mr. 
Hudson  spoke,  he  spoke  briefly,  and  always  to  the  point, 
dealing  chiefly  in  facts  and  affirmations,  a  course  which  secured 
him  attention. 

On  the  23rd  of  February,  1840,  the  chairman  of  the  Great 
"Western  charged  Mr.  Hudson,  in  the  House  of  Commons, 
with  having  encouraged  competition.  Tlie  ground  was  being 
cut  away  from  under  the  feet  of  the  directors  of  this  com- 
pany by  independent  branches  that  were  being  constructed 
in  various  directions  and  sapping  their  resources,  and  by  new 
and  rival  companies  created  for  the  sole  purpose  of  beino- 
bought  off,  and  he  predicted  most  disastrous  results  if  some 
steps  were  not  at  once  adopted  to  put  a  curb  on  reckless 
speculation.  Mr.  Hudson  maintained  that  the  course  recom- 
mended would  be  an  unfair  interference  with  private  enter- 
prise, and  his  view  was  taken  by  the  House.  At  the  same 
time  Mr.  Hudson  will  be  found  to  have  conducted  his  operations 


TACTS,    FAILUKES,    AXD    FBAUD3.  80 

in  the  interest  of  the  companies  with  which  he  was  connected, 
in  a  strictly  defensive  spirit,  and  to  have  brought  all  his  in- 
fluence to  bear  in  preventing  bills,  conceived  to  be  prejudical 
in  any  form  to  their  interest,  from  passing  through  committee, 
or,  if  thus  far  successful,  going  beyond  standing  orders. 

There  was  no  man  in  Great  Britain  a  more  strenuous  ad- 
vocate than  Mr.  Hudson  foi  continued  extensions,  branches, 
purchases  of  rivals,  and  amalgamations  with  reference  to 
the  lines  with  which  he  was  connected.  So  long  as  the 
delusion  held  that  a  sort  of  Parliamentary  guarantee  ac- 
companied the  security  tendered  by  these  lines  as  to  the  rate 
of  dividend  on  the  new  additions,  so  long  would  the  public 
rush  eagerly  in  as  purchasers.  Mr.  Hudson  undertook  to 
make  good  his  promises  to  those  who  came  up  at  his  call, 
though  this  could  only  be  done  at  the  expense  of  their  suc- 
cessors, unless  railway  property  itself  improved  at  a  ratio 
which  not  only  actual  receipts,  but  the  activity  exhibited  in 
the  projection  of  rival  lines,  and  of  extensions  in  all  directions, 
dividing  and  subdividing  the  course  of  mutual  resources, 
eflectually  prevented.  Mr.  Hudson  determined  to  push  Ins 
schemes  irrespective  of  any  which  might  receive  Parliamentary 
sanction  the  succeeding  session.  If  crossing  his  path,  he 
would  hunt  them  down,  or  proceed  to  make  arrangements  with 
them,  by  buying  them  up,  leasing,  or  amalgamating  them. 

In  addition  to  those  on  hand,  he  had  a  batch  of  schemes 
himself  to  bring  before  Parliament,  to  take  their  chance  with 
the  rest.  It  was  in  reference  to  some  of  these  as  well  as 
others  on  hand,  that  he  assured  the  Midland  shareholders  (on 
the  19th  of  January,  1846)  that  he  would  not  recommend  the 
abandonment  of  any  of  them ;  that  he  hoped  that  Parliament 
would  sanction,  if  not  all,  at  least  the  greater  portion  of  them ; 
and  that,  ere  long,  the  dividend  of  the  Midland  Company 
would  be  a  10  per  cent.  one.  He  said :  "  They  must  look  at 
this  property  of  £8,000,000  or  £9,000,000  as  they  would  look 


40  I'ACTS,   rAILXTEES,   AKD   TEATTDS. 

at  a  sound  commercial  enterprise,  and  not  be  deterred  from 
protecting  and  increasing  that  property  by  any  reasonable  risk 
that  it  might  be  necessary  to  encounter."  The  applause  which 
followed  encouraged  Mr.  Hudson — who  was  accustomed  to 
sound  the  feelings  of  his  audience  as  he  went  along — to  add : 
"  'We  are  not  deterred  from  our  purpose  by  what  has  occurred 
in  connection  with  new  schemes  (those  abortive  and  visionary 
schemes  undertaken  with  the  neglect  of  some  of  the  most  vital 
conditions  of  success,  and  the  debris  of  which  lay  scattered  in 
every  direction).  We  felt  that  your  property  possessed  far 
greater  stability ;  and  it  was  to  continue  and  increase  that 
stability,  that  we  projected  these  lines,  believing  them  to  be 
beneficial  to  the  community,  and  productive  as  well  as  protec- 
tive to  yourselves." 

There  are  men  who  refuse  to  profit  by  "  the  wisdom  of 
the  wise;"  who  actually  refuse  to  be  worked  up  to  a  fit  of 
enthusiasm  by  any  ideal  appeal  or  abstract  financial  achieve- 
ment ;  who,  accordingly,  persist  in  taking  account  of  "  termi- 
nable periods"  and  "last  results."  On  this  occasion  a 
proprietor  had  the  audacity  to  say  that  he  thought  the  com- 
pany had  better  finish  the  lines  in  hand  before  they  undertook 
such  extensive  schemes  as  those  dilated  upon.  The  observa- 
tion was  received  with  uproarious  laughter.  What  else  could 
he  expect  ?  What  right,  indeed,  had  he  to  think  ?  Will  it  be 
believed  that  the  said  proprietor,  not  content  with  so  ridiculous 
a  remark,  culminated  his  folly  by  saying,  "  Should  the  company 
get  involved  in  £4,000,000  of  debt,  it  would  be  a  very  serious 
matter."  Eenewed  laughter  ensued,  to  the  utter  discomfiture 
of  the  doubting  proprietor.  The  Midland  shareholders  acted 
up  to  their  impressions.  The  Leeds  and  Bradford  was 
actually  taken  by  them  on  lease  at  10  per  cent,  in  perpetuity, 
and  Mr.  Hudson,  from  whose  address  in  January  quotations 
have  already  been  made,  thus  addressed  them  in  July : — 

"  Gentlemen,  I  repeat  that  I  shall  be  most  happy  to  be 


PACTS,   FAILITBEa,   A5D  T&JiUVS.  41 

lessee  under  you ;  to  give  any  security  you  like ;  and  to  take 
all  the  risk  if  I  am  to  get  all  the  profit.  I  cannot  say  more 
to  prove  to  you  how  highly  I  think  of  the  line." 

^Ir.  Hudson's  sympathetic  powers  were  remarkably  strong. 
He  was  accustomed  to  infuse  his  own  confidence  into  others. 
On  this  occasion  he  went  through  the  usual  pantomime  of 
assuming  to  change  places  with  the  body  of  shareholders.  He 
delighted,  not  only  to  take  upon  himself  the  responsibility  of 
a  scheme — in  advance  of  its  ratification  on  the  part  of  tho 
shareholders — but  to  come  after,  in  the  very  heigh-day  of  their 
enthusiasm  and  delight,  and  tempt  them  pleasingly  to  make 
back  to  him  the  bargain  over  which,  on  his  assurance,  he  knew 
them  to  be  all  chuckling. 

To  the  York  and  North  Midland  shareholders,  Mr.  Hudson 
assumed  tho  form  of  one  of  those  benignant  deities  who  at 
their  mere  will  shower  down  on  humble  mortals  undeserved 
blessings.  At  every  new  issue  on  branches,  extensions,  or 
amalgamations,  they  were  enriched,  notwithstanding  the  larger 
measure  of  the  obligations  thus  incurred.  The  sums  divided 
among  them,  to  be  paid  out  of  future  earnings,  were  defini- 
tively stated  at  £83,792.  As  far  as  apparent  beneficial  results 
went,  they  could  desire  no  division  of  the  control  exercised  by 
Mr.  Hudson.  At  the  same  time,  the  shareholders  in  general 
relied  on  the  accuracy  of  the  published  accounts ;  whilst  the 
directors,  participating  in  abuses  which  prevailed,  carefully 
aided  in  preventing  all  disclosures  which  might  afi'  ct  the 
marketable  value  of  the  property.  When  a  committee  of 
investigation  was  ultimately  appointed,  they  threw  every 
obstacle  in  tho  way  of  a  fair  and  full  examination ;  and  this 
was  pointedly  complained  of. 

The  plenary  indulgence  conceded  to  Mr.  Hudson,  by  which 
his  will  was  made  law,  all  complaints  of  those  who  naturally 
esteemed  themselves  not  fairly  dealt  with  in  various  trans- 
actions being  silenced  at  his  mere  beck,  cannot  be  better 


42  FACTS,    FATLUIiES.    ASD    FBAUDS. 

illustrated  than  in  an  anecdote  of  IMj.  Hudson  in  his  palmy 
davs,  related  of  hiiu  at  the  board  meeting  of  a  certain  line. 
The  honourable  gentleman  had  allotted  to  himself  600  shares, 
and  another  member  of  the  board  200.  These  shares  having 
risen  to  £5  premium,  the  latter  gentlemaji  thought  he  ought 
to  have  a  larger  number,  and  accordingly  intimated  his  opinion 

to  Mr.  Hudson.      "  I  have  been  accustomed,  Mr.  ," 

replied  the  raUvray  monarch,  "  to  hare  gentlemen  with  whom 
I  am  associated  s;itistied  with  my  arrangements ;  and  if  you  are 
Jiot,  I'll  retire,  and  leave  the  afiairs  in  your  custody,  which  I 
dare  say  you'll  manage  better  tlian  I  do,  as  I  have  so  much 
etiier  business  on  my  hands.'*  "  Oh,  certainly  not ;  by  no 
means,  Mr.  Hudson,"  bowingly  responded  the  crest-fallen 
director ;  "  I  am  sure  all  you  do  is  right,  and  I  am  quite  satis- 
fied with  your  arrangement,"  It  is  needless  to  say  no  further 
complaint  vras  nade  by  any  of  Mr.  Hudson's  colleagues  at  that 
board. 

In  apportioning  out  shares  on  improductive  lines,  which  he 
presently  designed  drawing  into  his  general  system,  on  the 
goorantee  of  a  high  dividend,  Mr.  Hudson  was  the  means  of 
conferring  on  his  friends  and  sa^pwtecs  an  almost  incredible 
amount  of  wealth.  Every  upfwrtuafty  was  taken  to  advise 
them  early  of  those  amalgii— tiuui  which  were  to  raise  the 
maximum  profit  far  bevon.l  the  pmat  necessary  to  induce  them 
to  lay  out  their  capital  on  the  prospective  undertaking.  How- 
ever unmarketable  the  shares,  they  w»e  at  once  bought  up. 
In  the  he%bt  of  the  mania  of  1S46,  a  gentleman  who  had  lost 
a  lai^  fortune  in  fruitless  speculation  in  railway  stock,  and 
who  had  but  £2000  remaining,  bethought  himself  as  a  lasfc 
resort  of  seeking  the  advice  of  Mr.  Hudson,  who  had  casually 
told  him  years  before  tiiat  he  would  be  happy  to  serve  him 
whenever  the  opportimity  preaeaated  itself.  Mr.  Hudson  was 
M  good  as  his  word,  and,  as  the  best  proof  of  his  friendship. 


Tucn,  TxiLVaEM,  Asro  r&iriM,  4S 

instrocted  him  to  inrest  eren  the  hut  i^eaaj  he  had  in  tlie  vorid 
in  certain  unmaricetable  shares  whidi  he  iodirated.  Behold 
the  pow^  of  implicit  iaith!  An  amalgamiition  of  tiie  fine 
with  HodBon's  own  was  in  protpeet,  and  the  inrestment  that 
Hudson  had  directed  proved  highly  profitable  and  reoraneratire. 
"With  respeettoproprietorsander  the  ironnJe  of  Mr.  Hndaon 
ever  knowing  the  true  state  of  affnrs^  he  appears  to  have 
adopted  on  thor  behalf  the  apt  uaaixmtak — 

''Wbate  igBotuwe  u  Uim,  'ti*  ftAj  to  be  viae.** 

And  donbifess  defined  that  they  should  hare  the  fiiU  Benefit  of 
this  amount  of  human  wisdom.  Bot  mete  owr-paiymeats  were 
iar  from  including  all  the  pariaedarB  of  deieit  tins  nnntea- 
tionalljoecasioned.  Errors  eztaided  into  the  wotldng  arrange- 
ments entered  into  w^Tarionsoompamea.  Inansgnmgsmciit 
fat  the  advantage  of  the  Midland  Hne^  tjie  company  for  aome 
time  carried  passengws  into  Leeds  at  an  aetnal  loss,  and  in  its 
oooneetion  with  the  Lancashire  and  Yorkshire  it  reenred 
£5000  per  annum  kas  than  it  was  ^caAy  tnthHed  to.  In  a. 
kanBaetion  with  the  If eveaatie  and  Daaiington  Company,  that 
company  was  cfaai^ged  £2203  too  mudi,  and  the  Toric  axid 
North  Midland  Company  £2203  too  fittieu 

It  was,  of  eoorse,  immaterial  how  irregoiar  entries  were 
eorered.  The  aeeounts  to  whidi  it  was  most  cenvenient  to 
carry  the  required  debits,  to  nuke  good  defieicndes  opontbe 
dktrilmtion  or  annoaneonent  of  vneamed  dividends,  were 
tiiose  of  eooairaetion  and  aundzioL  Li  one  instance^  when  it 
was  thought  desirable  to  represent  tbe  passenger  and  mer- 
^andise  traffc  at  £4<KM>  beyond  real  eaminga,  stataoss  were 
debited  wift  £8000.  Ereiything  went  to  show  that  Omw 
doabtfol  entries  were  not  prompted  by  unanticipated  oner- 
geneies,  but  were  reaorted  to  as  a  permanent  means  of  reSering 
iweteot  sharehoideta  from  flie  <mas  of  tJie  obKgstiiiiiB  IhejluA 


44)  FACTS,   FAILUEES,   AXD    TEAUDS. 

incurred,  and  gratifying  tliem  to  the  extent  of  tbeir  desires, 
irrespective  of  actual  success,  or  the  ratio  of  progressive 
increase  in  actual  profits.  At  the  half-yearly  meeting  of  the 
York  and  North  Midland  Company  in  August  1847,  when  10 
per  cent,  dividend  was  declared,  Mr.  Hudson  observed  that  it 
was  not  for  him  to  estimate  the  precise  eflfects  which  the 
opening  of  the  extensions,  then  ahout  to  come  into  operation, 
would  have  on  the  parent  undertaking ;  but  if  the  traffic  realized 
the  expectations  of  directors,  he  hoped  they  might  be  able  to 
declare  the  same  amount  of  dividend  as  they  had  the  pleasure 
of  submitting  to  them  that  day.  At  the  same  time,  he  would 
not  disguise  from  them  the  possibility  of  a  diminution  of  divi- 
dend for  the  next  half-year. 

The  powerful  influence  exerted  by  the  bestowal  of  shares 
on  those  who  could  further  or  impede  his  projects  of  amalga- 
mation or  extension,  was  never  overlooked  by  IVIr.  Hudson. 
A  consideration  could  thus  be  unobtrusively  forced  on  one 
who  would  have  refused  openly  to  receive  money  for  his  ser- 
vices. Besides  these  shares,  voted  to  themselves  by  directors, 
or  appropriated  at  par,  cost  nothing ;  the  burden  of  paying 
a  dividend  upon  them  was  likely  to  fall  on  the  succes- 
sors of  the  existing  shareholders.  It  is  evident  that  secresy 
was  an  essential  element  of  success  in  these  distributions.  No 
trace  was  suffered  to  exist  of  the  way  in  which  shares  had  thus 
been  bestowed,  and  consequently  the  books  of  the  company 
afforded  no  record  of  allotment.  This  was  the  case  with  1170 
Hull  and  Selby  shaves  voted  to  Mr.  Hudson  by  his  co-directors 
of  the  Berwick  and  Newcastle  Eailway  Company,  some  of 
which  Mr.  Hudson,  doubtless,  appropriated  to  himself  whilst 
others  found  acceptors  in  the  manner  already  indicated.  So 
with  the  2000  shares  of  the  Brandling  Junction  Eailway,  voted 
to  Mr.  Hudson  by  the  same  directors,  at  a  time  when 
they  were  at  £21  premium,  being  equivalent  to  a  bonus  of 
£42,000.      The  same  may  be  safely  affirmed  of  transactions  in 


TACTS,    FAILITEES,    AXT)   FRAUDS.  45 

connection  with  the  Midland,  and  York  and  North  Midland 
Kaihvays.* 

But  now  the  full  effect  of  new  lines,  branches,  and  exten- 
sions became  to  be  perceived.  Towards  the  close  of  1847, 
meeting  after  meeting  was  held  at  Manchester  and  other 
large  towns,  at  which  the  constantly  recurring  railway- 
calls,  and  the  heavy  pressure  they  occasioned,  were  the 
special  subjects  of  consideration ;  and  demands  for  the  post- 
ponement of  different  works  in  progress  were  urgently 
enforced.  But  works  in  progress  could  not  be  abandoned 
without  a  heavy  loss,  as  the  productiveness  of  a  railway 
depended  on  its  completion.  Calls  on  lines  advancing  towards 
completion  could  not  be  refused,  however  inconvenient  this 
might  be,  as  all  previous  payments  would,  in  these  cases,  have 
been  uselessly  employed.  These  representations  had  the  most 
disastrous  effects  on  cojnmerce.  No  ordinary  industrial  under- 
taking could  bear  up  against  the  enormous  stringency  which 
the  monthly  increasing  absorption  for  these  purposes  occa- 
sioned ;  and  in  this,  as  in  all  other  misapplications  of  capital, 
the  loss  and  suffering  eventually  fell  upon  the  industrial  classes. 
The  last  twelvemonths  had  witnessed  an  enormous  reduction  in 
the  value  of  railway  property.  The  amount  of  depreciation  on 
the  shares  of  ten  leading  companies,  as  compared  with  the 
estimate  of  1845,  without  including  current  calls,  was  calcu- 
lated at  upwards  of  £78,000,000.  The  unfulfilled  obligations 
and  further  contingent  liabilities  of  this  description  of  pro- 
perty had  progressively,  but  inconveniently,  become  more 
apparent,  and  the  public  as  well  as  proprietors  began  to 
reflect  on  the  causes  and  future  prospects  of  this  peculiar 
state  of  things.     Two  hundred  millions  of  money  had  been 

*  It  bos  been  asserted  tbat  parliameutaiy  aerricea  were  secured  in  some 
instancca  by  a  free  distribution  of  shares,  but  although  Mr.  Hudson  was 
during  the  investigations  severely  pressed  on  his  point,  he  never  could  bo 
induced  to  divulge  the  real  facts. 


46  FACTS,    rATLUEES,    A"N'D    FEAITDS. 

subscribed,  paid  up,  or  borrowed,  not  to  speak  of  the  addi- 
tional cost  to  existing  shareholders.  Fifty  millions,  at  least, 
bad  been  lost  in  the  actual  expenditure  on  the  works,  and 
there  had  been,  according  to  ordinary  estimates,  a  clear  sacrifice 
to  proprietors  of  one  hundred  millions. 

The  progress  of  the  reaction  being  fully  apparent,  expenses 
were  reduced,  but  obligations  were  increasing,  and  traffic 
would  not  bear  up  the  burden  which  Mr.  Hudson,  by  his  divi- 
dends, nominally  imposed  on  it.  AVhere  much  confidence  had 
been  given,  large  dividends  were  required.  To  withhold  these 
after  he  had  once  arbitrarily  and  suddenly  augmented  them, 
was  next  to  impossible.  He  felt  himself  compelled  to  go  on 
in  the  course  he  had  adopted,  looking  to  the  future  to  make 
good  the  adverse  balances  against  the  company  thus  created. 
From  January  of  1845  there  was  not,  it  subsequently  ap- 
peared, an  account  sent  in  to  directors,  which  did  not  come 
back  in  altered  form,  so  as  to  increase  the  apparent  sum  appli- 
cable to  dividend. 

In  tlie  case  of  the  Eastern  Counties  Company,  the  accounts 
came,  of  course,  regularly  before  an  examining  committee, 
but  as  this  committee  had  for  two  of  its  members  Mr.  Hudson 
and  Mr.  "Waddington,  the  other  members  did  not  think  it 
worth  their  while  to  assemble.  The  committee,  as  a  whole, 
never  met.  Good  care  was  taken  by  Mr.  Hudson,  at  each  peri- 
odical meeting,  that  none  but  his  faithful  deputy-chairman 
"  should  bear  him  company."  He  was  now  ready  to  demon- 
strate that  to  accumulate  debt,  in  the  manner  and  to  the 
extent  that  had  been  done,  was  the  very  reverse  of  good 
management,  and  only  to  be  justified  by  the  fact  of  pressure 
from  without.  Henceforth  he  would  stand  by  good  and 
solid  lines.  "  The  public,"  he  said,  "  have  become  more  dis- 
cerning, and  are  more  competent  to  seek  out  good  lines." 
The  truth  was,  the  public  would  no  longer  consent  to 
take  shares  in  unremunerating  and  precarious  iavestments. 


FACTS,  FAILUBES,   XTUD  FBATJDS.  47 

As  Mr.  Hudson  remarked,  "  they  would  not  patronize  any  new 
railway  simply  because  it  was  a  railway."  "  The  result  of  this 
speculation  iu  the  end,"  he  continued,  addressing  the  Midland 
Railway  Company,  "  will  be  to  make  the  property  of  good, 
solid  lines  more  sought  for,  more  valuable,  and  more  produc- 
tive. They  might  then  fairly  look  forward  to  an  improvement 
in  the  value  of  their  property ;  and  his  advice  to  them  waa, 
'  if  you  have  got  a  good  thing,  stand  by  it.'  He  trusted  there 
would  never  be  anything  to  weaken  their  confidence  in  the 
board  and  in  the  property  which  he  and  his  brother  directors 
represented."  He  referred  to  the  several  meetings  which  had 
recently  taken  place  of  a  tumultuous  character,  at  which 
directors  had  been  called  to  account  for  having  reduced  their 
dividends.  "  That  might  have  been  the  position  of  the  directors 
of  that  company,  but  in  such  case  they  would  meet  them  with 
the  same  confidence." 

When,  in  1848,  general  inquiry  was  awakened  as  to  the 
management  of  these  undertakings,  when  confidence  needed 
to  be  reassured  as  to  the  character  of  investments,  Mr.  Hudson 
ridicvded  the  investigations  then  being  instituted,  as  far  as  the 
railways  with  which  he  was  connected  were  concerned.  He 
was  at  no  loss  for  figures  of  speech  to  convey  sentiments  both 
of  irony  and  sarcasm.  Statements  of  railway  companies  in 
general  were  certainly  of  a  character  to  depress  the  price  of 
shares  ;  and  it  was  only  consonant  with  Mr.  Hudson's  policy  for 
him  to  conceive  that  nothing  could  be  so  disastrous  to  the 
interests  of  shareholders,  whose  property  all  along  had  been 
maintaining  a  fictitious  value,  as  really  to  know  of  what  it  con- 
sisted, and  what  were  their  actual  and  future  resources.  He 
regarded  them,  in  suggesting  this  inquiry,  as  deluded  victims, 
to  whom  he  had  a  duty  to  discharge — a  duty  of  protection  and 
kindness.  He  owed  it  to  them,  and  it  was  the  greatest  of  all 
benefits  he  could  confer  on  them,  to  uphold,  as  far  as  possible, 
the  assumed  value  of  the  shares,  until,  in  the  course  of  events, 


48  FACTS,   TAILUEES,   AKB   FHATJDS. 

general  credit  revived,  and  he  was  enabled  yet  further  to  con- 
solidate their  interests.       The  plea  was   not   without   some 
ground  of  justification.     The  best  railway  stock  being  at  this 
juncture    unduly    depreciated,    it    was  not  surprising   share- 
holders began  to  be  watchful  of  their  interests,  which   had 
undergone  such  a  decided  change.     A  strong  suspicion  existed 
in  various  quarters  that  the  accounts  of  companies  had  been 
framed  with  a  view  to  purposes  of  deception.     Mr.  Hudson 
resorted  anew  to  his  usual  means  to  make  good  the  promises  and 
hopes  he  had  inspired.     At  the  same  time,  he  applied  himself 
to  promote  the  business  of  the  companies  Avith  which  he  was 
connected,    and  with   a   success   which   only  his  knowledge, 
energy,  and  systematic  measures  could  have  secured.      ]\Ir. 
Hudson  afiected  to  lament  before  the  York  and  North  Mid- 
land shareholders,  that  the  Legislature  and  public  opinion  had 
forced  new  undertakings  upon  them — undertakings  for  which 
he  had  been  so  much  lauded,  though  which,  under  the  guarantee 
of  the   parent  line,  such  large  dividends  had  been  promised, 
and  such  high  premiums  had  passed  into  the  hands  of  the 
original  proprietors.     Under  the  authorization  by  which  those 
extensions  were  carried  out,  "  millions  of  money,"  as  has  been 
well  remarked,  "  passed  into  the  pockets  of  the  shareholders 
just  as  effectually  as  if  it  had  been  voted  directly  to  them  by 
the  House  of  Commons,  and  paid  by  the  Treasury  from  the 
public  revenue."     Mr.  Hudson  also  described  some  of  those 
acquisitions  he  was  supposed  to  have  made  at  the  period  of 
general  enthusiasm  for  extension,  as  necessary  on  the  ground 
of  mere  defensive  action.     "  If  they  had  not  thrown  out  these 
arms  and  branches,"   he  said,    "  the   proprietors  would  have 
found  their  property  irretrievably  injured."     At  public  meet- 
ings and  in  Parliament,   Mr.   Hudson  had  boldly  given   his 
voice  in  favour  of  unrestricted  competition  ;  now  he  complained 
of  it,  when  the  advancing  tide  of  public  inquiry  threatened  to 
approach    his  feet.      His  most    remarkable    announcement, 


FACTS,    Fi-ILUIIES,    AND    FHAUDS.  49 

however,  was  to  the  effect,  that  there  was  a  point  beyond 
which  it  would  not  be  prudent  to  push  amalgamation,  and  ho 
believed  they  had  now  reached  it.  Mr.  Hudson  had  pro- 
bably contemplated,  when  affairs  wore  a  brighter  aspect,  an 
amalgamation  of  the  Midland  with  the  London  and  K'orth 
Western  Eailway,  and  possibly,  in  the  evanescent  dreams  of 
regal  ambition,  an  amalgamation  of  all  the  railways  in  Great 
Britain ;  but  in  this  address  he  recognized  limits  to  his  rule, 
and  openly  discarded  the  very  policy  which  had  hitherto  so 
successfully  sustained  him. 

George  Hudson  himself,  doubtless,  looked  chiefly  to  ulti- 
mate returns,  and  continually  evinced  his  readiness  to  sacrifice 
a  large  portion  of  his  gains  to  the  confidence  he  entertained 
of  being  ultimately  enabled,  under  a  proper  system,  to  mako 
all  the  lines  over  which  he  presided  pay  a  full  dividend.     Un- 
til that  time  came,  however,  he  resorted  to  all  manner  of 
means  to  establish  his  position.     He  could  not  afford  to  be 
subjected  to  the  least  fluctuation  of  public  opinion.     He  had 
to  keep  his  credit  up  at  every  risk,  and  whilst  lavish  at  times 
in  the  issue  of   shares,  his  skill  and  management  gave  him 
power  to  put  them  in  a  way  of  affording  eventually  a  fair 
compensation  for  their  outlay.      The  lines  combined  under 
him  constituted  "a  whole  within  itself,"  and  the  effect  of  his 
policy  was  not  only  to  prevent  independent  action  on  the  part 
of  other  companies,  but  to  drive  them  into  a  common  arrange- 
ment in  which  he  secured  the  chief  advantage,  and  always  at 
the  expense  of  the  public.     If  an  independent  line  on  a  route 
in  connection  with  the  York  and  North  Midland,  the  Eastern 
Counties,  the  Midland,  or  the  Newcastle  and  Berwick  reduced 
its  fares,  George  Hudson  assimilated  the  amount  of  reduction 
on  his  own.    The  jealousy  with  which  his  system  of  combina- 
tion was  therefore  regarded   by  proprietors  of   independent 
lines  may  easily  bo   imagined.      He  pressed  his    despotic 
control  to  the  utmost  limit  allowed  by  law,  so  that  thoso 

E 


50  TACTS,    TAILUEES,   A2fD   rilArDS. 

companies  were  thereby  disabled  from  maintaining  an  effective 
competition ;  all  the  forms  of  inconvenience  that  could  arise 
from  the  arrangement  of  trains  was  inflicted  on  a  rival.  It 
was  considered  a  legitimate  war,  and  one  after  another  of 
those  independent  lines,  notwithstanding  much  determination 
and  perseverance,  was  brought  to  under  this  all-powerful 
coercion.  Next  to  the  power  attainable  by  combination  in 
making  all  independent  lines  tributary,  and  in  imposing,  with- 
out reference  to  other  companies,  a  high  scale  of  charges,  a 
further  motive  with  Mr.  Hudson  was  the  additional  economy 
with  which  lines  thus  brought  into  connection  could  be  worked. 
Indeed,  little  doubt  can  be  entertained  but  that  the  railway 
monarch,  who  thus  temporarily  held  such  undisputed  sway  in 
these  especial  realms  of  government,  originated  that  species  ol 
competition  and  internecine  warfare  which  has  lately  so  dis- 
tincruished  itself  between  the  Great  Northern,  the  London 
and  ISTorth  Western,  and  other  associated  undertakings. 

As  illustrating  his  powers  of  discussion,  it  may  be  mentioned 
that  on  one  occasion,  "when,  against  the  wish  of  Mr.  Hudson,  a 
desire  was  expressed  in  the  form  of  an  opinion,  a  committee  had 
been  carried  for  the  purpose  of  looking  into  the  accounts,  he  ob- 
served, on  leaving  the  room,  "  Well,  gentlemen,  I  am  chairman 
of  this  committee,  and  of  course  you  will  not  meet  until  I  sum- 
mon you."  That  summons  was  never  issued.  Mr.  Hudson 
left  others  to  draw  what  inference  they  chose.  For  share- 
holders to  have  passed  any  motion  against  his  openly  ex- 
pressed opinion  was  a  sufficient  triumph  in  itself,  without 
its  being  suffered  to  pi-oceed  any  further.  As  an  act  pro 
forma,  the  appointment  of  the  committee  was  not  unreason- 
able. But  what  did  they  want  more  ?  Mr.  Hudson  was 
at  any  time  ready  to  pronounce  on  the  satisfactory  state  of 
affairs. 

But  the  day  was  fast  approaching  when  he  himself,  the  great 
railway  king,  would  be  called  upon  to  render  an  account  of  his 


FACTS,   FAILVSES,    AKO   FllAUDS.  61 

atewardsbip.  It  was  evident  that  peculiar  causes  continued 
to  weigh  heavily  on  the  share  market.  The  extent  of 
the  eugagements  into  which  the  great  companies  had  been 
induced  to  enter,  with  a  view  to  their  gigantic  combinations, 
the  absorption  of  capital  in  these  undertakings,  and  the 
sacrifices  sustained  by  those  who  had  purchased  at  a  pre- 
mium shares  that  were  now  only  negotiable  at  an  alarming 
discount,  began  to  tell  with  disastrous  effect.  Shareholders 
were  no  longer  fed  with  hopes  of  new  amalgamations, 
purchases,  extensions,  by  which,  in  their  turn,  they  might 
prey  on  others ;  nor  did  pm^chaaers  choose  to  be  content 
with  the  fact  that  a  certain  rate  of  dividend  had  been  paid 
for  years,  but  demanded  a  full  and  free  inquiry,  and  would  not 
rest  satisfied  xmtil  a  searching  examination  of  accounts  had 
been  presented.  Stormy  meetings  were  held  in  connection  with 
the  whole  of  the  principal  companies ;  but  Mr.  Hudson,  from 
the  prestige  he  enjoyed  and  from  his  confidence  that  the 
present  feeling  of  unpopularity  would  take  a  different  turn, 
did  not  anticipate,  for  a  moment,  being  arraigned  before  the 
public  to  support  this  asserted  confidence ;  and,  to  avert  all 
inquiry  for  the  moment,  increased  misrepresentation  was  re- 
sorted to.  The  corrupting  moral  effect  of  that  high  tide  of 
speculation,  now  returning  to  its  original  bed,  had  an  un- 
questionable influence  with  Hudson  and  his  other  associates 
in  glossing  over  the  culpability  of  his  acts. 

A  glance  at  the  rektive  position  of  the  York,  Newcastle,  and 
Berwick  line,  so  largely  dependent  on  the  prosperity  of  those 
routes  with  which  it  was  in  communication,  will  show  how  dir- 
rectly  the  general  disturbance  of  trafl&c — a  disturbance  insepar- 
able from  monetary  pressure — must  have  affected  it.  It  was  im- 
possible in  view  of  the  general  decline  of  railway  property,  and 
the  known  disadvantages  under  which  this  line  was  labouring, 
that  Mr.  Hudson  could  present  with  any  safety  or  immunity 


52  TACTS,   FAILUEES,    AND  TEAUDS. 

from  the  most  searching  inquiry,  in  maintaining  the  usual  divi- 
dend, or  represent  as  divisible  that  large  amount  of  net  revenue 
by  which  he  had  been  accustomed  to  buoy  up  hopes  and  to  se- 
cure confidence  in  his  management.  When  the  report  of  the 
directors  was  read  and  presented  for  adoption  in  February  of 
1849,  the  apparent  absence  of  lucidity  in  the  accounts  would 
appear  to  have  struck  the  shareholders,  who  appointed  a  com- 
mittee of  investigation  to  enter  into  his  transactions,  and  to 
put  the  whole  affairs  of  the  company  under  examination.  They 
would  not  consent  to  declining  revenues  being  any  longer 
bolstered  up,  or  the  true  resources  of  dividend  mystified. 
The  suggestion  of  Mr.  Hudson  on  a  previous  occasion 
*'to  remember  who  had  received  the  profits,"  was  not 
acted  on  at  this  time.  Every  one  desired  deliverance  from 
the  labyrinthine  maze  into  which  they  had  been  so  blindly 
seduced. 

The  York,  Newcastle,  and  Berwick  proprietors  were  the 
first  to  impugn  the  management  of  Mr.  Hudson.*  A  com- 
mittee of  investigation,  appointed  to  look  into  the  transactions 
in  which  he  had  been  concerned,  in  addition  to  making  Mr. 
Hudson  a  debtor  for  the  amount  of  £11,292  on  the  Great 
North  of  England  purchase  account,  brought  attention  to  the 
fact  that,  besides  subscribing  for  3000  shares  of  Sunderland 
Dock,  on  behalf  and  under  the  assumed  authority  of  the 
company,  he  had  taken  a  further  quantity  of  2345  shares,  the 
calls  upon  which  he  paid,  without  any  formal  authority,  out 
of  the  funds  of  the  company,  such  payment  being  kept  from 
the  knowledge  of  the  shareholders.     Of  the  way  in  which  this 

*  Between  the  28th  of  February  and  the  I7th  of  May,  Mr.  Hudson 
resigned  his  position  as  chairman  of  the  following  railway  companies — 
Eastern  Counties,  Midland,  York,  Newcastle  and  Berwick,  and  York  and 
North  Midland,  and  committees  of  investigation  were  in  each  case  ap- 
pointed. 


PACTS,   JAILUEES,    AND   FBAUDS.  58 

was  managed,  the  summary    of  the  report   will    speak  for 

itself:— 

"  The  first  circumstances  detailed  by  the  committee  are,  that  Mr.  Hudson 
being  authorized  by  the  company  to  subscribe  for  3000  shares  of  the  Sun- 
derland Dock,  took  also  into  his  name  a  further  quantity  of  2345  shares, 
the  calls  upon  which  he  paid,  without  the  slightest  authority,  out  of  the 
funds  of  the  company,  such  payments  being  kept  from  the  knowledge  of 
the  shareholders  ;  that  Mr.  Hudson  now  states  he  made  the  purchase  of 
these  additional  shares  on  behalf  of  the  company,  and  that  the  committee 
are  of  opinion,  from  the  mode  in  which  the  transaction  was  conducted,  as 
well  as  from  the  fact,  that  no  minute  of  the  purchase  was  entered  until  two 
years  afterwards,  when  the  appointment  of  a  committee  of  investigation 
was  known  to  be  in  contemplation,  that  this  statement  cannot  be  received. 
The  committee,  therefore,  although  they  regret  the  individual  consequences 
that  must  follow,  recommend  steps  to  be  taken  to  recover  from  Mr.  Hudson 
the  amount  thus  misappropriated.  The  next  case  is,  that  the  creation  of 
42,000  shares  havuig  been  authorized  for  the  Newcastle  and  Berwick  line, 
the  issue  was  increased  to  56,000,  such  issue  being  concealed  from  the 
shareholders  by  delaying  the  completion  of  the  register  and  other  means 
which  '  call  for  the  strongest  reprobation ;'  that  this  proceeding  was 
carried  to  an  extent,  and  involved  an  amount  of  profit,  which  *  the  com- 
mittee hope  and  believe  to  be  without  a  parallel  in  the  history  of  public 
companies ;'  that  it  was  done  entirely  by  Mr.  Hudson  and  the  secretary, 
unknown  to  the  other  directors,  and  without  minute  or  entry  of  any  de- 
scription; that  the  number  of  these  shares  taken  by  Mr.  Hudson  was 
9956|i,  and  that  the  profit  realized  by  him  on  these  secret  operations  must 
have  amounted  to  £145,704,  if  the  sales  were  efiected  at  market  prices. 
The  committee  further  state  that  Mr.  Hudson,  having  been  called  upon, 
had,  in  their  opuiion,  wholly  failed  ia  offering  any  justification,  and  they 
recommend  that  he  be  compelled  by  legal  measures  to  make  full  restitution 
without  delay.  On  the  third  point  of  inquiry,  namely,  the  York  and 
Ifewcastle  Extension  shares,  the  facts  announced  are,  that  Mr.  Hudson 
took  5i)0  shares  of  this  issue,  to  which  he  had  no  right,  the  aggregate  pre- 
mium on  which  amounted  to  £4,000,  for  which  also  the  committee  recom- 
mended he  should  be  required  to  account.  They  further  report,  that 
although  Mr.  Hudson  paid  neither  deposit  nor  calls  upon  200  of  these 
shares  from  the  date  of  their  issue  in  February,  18i7,  until  the  present  in- 
Testigation,  the  parties  to  whom  he  sold  them  have  been  receiving  divi- 
dends upon  them  out  of  the  funds  of  the  company  as  regularly  as  if  all 
calls  had  been  duly  met ;  and  it  is  likewise  observed  that  while  Mr.  Hudson 
was  making  these  sales  for  his  own  benefit,  9682  unappropriated  shares 


54i  TACTS,    rAILlKES,    AXB    FHArUS. 

were  held  by  the  company,  which  might  have  yielded  a  proSt  of  £100,000, 
but  that  no  such  sales  have  ever  been  made  for  the  benefit  of  the  share- 
holders. The  fourth  case  detailed  comprites  the  fact  of  2000  shares  of 
the  Brandling  Junction  EaUway  being  voted  to  Mr.  Hudson  by  his  brother 
directors  at  a  time  when  they  were  at  £21  premium,  being  equivalent  to  a 
bonus  of  £42,000.  Tiie  fifth  case  is  a  transaction  in  iron.  On  the  11th  of 
Januaiy,  1845,  Mr.  Hudson  concluded  a  contract  for  10,000  tons  of  iron 
rails  at  £6  10*.  per  ton,  and  within  three  weeks  he  advertised  for  20,000 
as  chairman  of  the  2fewcastle  and  Bern-ick  line.  Of  this  quantity  7000 
tons  were  supplied  to  the  company  at  £12  per  ton  out  of  the  10,000  he 
had  just  purchased  on  his  own  account.  The  profit  on  this,  the  committee 
remark,  '  would  amount  to  £38,500,  and  Mr.  Hudson  must  have  known  he 
was  acting  illegally.'  The  sixth  and  last  statement  is,  that  Mr.  Hudson  in 
1845  took  from  the  funds  of  the  Newcastle  and  Berwick  line  £31,000, 
which  was  entered  as  a  payment  for  '  land,'  but  which  he  applied  to  his 
own  purposes,  none  of  the  cheques  by  which  he  obtained  this  amount  having 
been  handed  to  the  parties  in  whose  favom-  they  purported  to  be  drawn. 
Since  the  appointment  of  the  committee  of  investigation,  however,  Mr, 
Hudson  has  refunded  £20,000,  '  with  interest  for  above  three  years,  dui-ing 
which  he  had  improperly  held  the  money.'  Finally,  Mr.  Hudson,  in  1847, 
drew  out  £40,000,  which  was  charged  under  the  head  of  '  works,'  but 
which  he  paid  to  his  own  private  credit,  at  his  banker's.  This  sum  also, 
with  £2479  for  interest,  he  refunded  nine  weeks  back.  It  only  remains 
to  be  added,  that  the  report  thus  presented  by  the  committee  is  merely  an 
instalment  of  what  they  will  have  to  submit  to  the  shareholders  as  the  re- 
sult of  their  investigation,  the  duty  being  too  extensive  and  compMcated 
to  allow  them  as  yet  to  announce  its  definitive  completion." 

The  details  rendered  by  the  York  and  North  Midland  Com- 
mittee were  equally  damaging,  the  Hull  and  Selby  purchase 
aaid  the  traffic  accounts  attracting  their  immediate  notice : — 

"  On  the  first  point,"  it  was  remarked,  ''the  committee  confirm  the  ex- 
istence of  a  difiereuce  between  the  amount  paid  by  Mr.  Hudson  for  certain 
Hull  and  Selby  shares  on  account  of  the  company  and  the  amount  re- 
ceived by  him  from  the  company,  this  difference  being  £3196  Cs.  6d. 
At  the  same  time  they  abstain  from  impugning  the  decision  of  the  directors 
on  the  20th  of  April  last,  that  Mr.  Hudson  should  take  the  said  shares  back 
and  refund  the  £40,000  received  for  them,  although  they  would  Lave  pre- 
ferred that  this  repaymenj;  should  have  been  in  cash  instead  of  in  Mr. 
Hudson's  note  of  hand  at  twelve  months'  date.  Regarding  the  traffic  re- 
turns, the  committee  mention  that  the  weekly  statements  are  necessarily 


FACTS,   FAILUKES,  A2fD    lEATJDS.  55 

made  up  to  some  extent  from  estimates  merely,  and  they  subjoin  a  table,  by 
which  it  appears  tbat  the  excess  on  these  estimates  in  18i8,  as  compared 
with  the  actual  earnings,  was  £15,7G2,  while,  on  the  other  hand,  since  the 
1st  of  January,  in  the  present  year,  they  have  been  less  than  the  earnings 
by  £1876.  Finally,  with  regard  to  the  assurance  given  to  the  last  general 
meeting,  on  the  authority  of  Mr.  Hudson,  that  the  accounts  to  the  Slst  of 
December  were  correctly  stated,  the  committee  announce  that  the  accounts 
were  not  correct,  and  that  several  entries  were  altogether  delusive,  some 
of  them  having  'been  made  by  Mr.  Peter  Clarke  in  compliance  with  an 
intimation  conveyed  to  him  to  that  effect  verbally  by  Mr.  Hudson,  with- 
out Mr.  Clarke  informing  any  of  the  other  directors,  who  were  entirely 
ignorant  at  the  time  that  any  such  improper  entries  were  made  in  the  books.' 
The  committee  add  that  tlie  accumulation  of  various  irregularities  since 
1845  amounts  to  about  £75,000,  exclusive  of  all  sums  which  may  have 
been  improperly  placed  to  capital  account  in  former  years  ;  that  the  books 
have  been  kept  and  the  business  conducted  in  the  most  slovenly  manner ; 
that  there  has  never  been  any  regular  account  of  stores  ;  that  the  trades- 
men's accounts  have  never  been  called  for  and  settled  as  a  preliminary  to 
the  preparation  of  the  various  balance  sheets." 

A  short  time  only  elapsed  before  the  clouds  that  hung  over 
Mr.  Hudson's  reputation  had  settled  into  thick  darkness.  It 
was  on  the  28th  of  February  that  the  half-yearly  meeting  of 
the  Eastern  Counties  Eailway  was  held,  some  intimation  as  to 
the  true  state  of  the  company's  affairs,  or  rather  of  the  way 
in  which  the  accounts  had  been  tampered  with,  had  previously 
reached  the  shareholders,  and  Mr.  Hudson,  it  may  easily  be 
supposed,  was  not  disposed  to  encounter  them.  Accordingly, 
he  absented  himself,  and  left  them  to  "  waste  upon  the  air  their 
unavailing  plaints."  How  they  would  have  treated  Mr.  Hud« 
son,  had  he  been  present,  may  be  judged  from  their  proceed- 
ings  at  a  meeting  held  the  succeeding  May,  when  Mr.  Wad- 
dington,  M.P.,  the  deputy-chairman,  together  with  the  com- 
mittee of  investigation,  attended.  When  the  committee  entered 
the  room,  they  were  taken  by  the  infuriated  assembly  to  be 
members  of  the  board,  and  consequently  were  received  with 
bowlings,  groaniugs,  hisses,  contemptuous  shouting,  and  de- 
risive laughter.  In  the  brief  pauses  of  this  continuous  tempest 


56  FACTS,   FAILUEES,   A^'D   ZKAUDS. 

of  abuse,  Mr.  "VVaddington  only  gained  the  opportunity  to 
declare  and  acknowledge  the  unfortunate  position  in  which  they 
•were  placed,  and  to  announce  the  resignation  of  the  board.* 

Hardly,  for  either  justice  or  favour,  could  Mr.  Waddington 
be  permitted  to  proceed.      So  completely  did  he  and  his  col- 

*  The  following  is  the  characteristic  report  of  Mr.  Waddington's 
speech.  Mr.  "Waddington  was  understood  to  say,  in  the  partial  calm 
which  ensued — "  Gentlemen,  I  am  not  at  all  sorry  that  it  has  fallen  to  the 
lot  of  Mr.  Meek  to  address  you  this  day  hefore  I  have  done  myself  the 
honour  of  addressing  you.  (Laughter.)  To  appeal  to  you  as  Englishmen 
to  listen  to  a  man,  who,  though  he  may  be  under  a  ban  now,  yet  feels  that 
before  he  sits  down  you  will  thank  him  for  having  risen — (Confusion) — 
Gentlemen,  I  do  not  stand  here  for  my  own  aggrandizement — (Loud  laugh- 
ter, and  cries  of  'Sit  down') — but  I  stand  here — (A  Toice  :  '  How  about 
the  £2000  ?') — I  stand  here  in  a  painful  position — ('  No  doubt  you  do.') 
— I  say,  it  is  most  painful  to  think  that  one  with  whom  I  was  formerly  on 
the  most  intimate  terms  of  brotherly  friendship — ('Oh,  oh,' and  laugh- 
ter)— it  is  painful  for  me,  I  say — (Groans,  hisies,  and  cries  of  '  Sit  down, 
sit  down,'  accompanied  with  such  general  interruption  that  the  hon.  gen- 
tleman found  it  impossible  to  bring  his  sentence  to  a  termination.)  *  * 
I  feel  that  if  the  gentleman  of  whom  I  was  speaking  were  to  review  what 
has  since  passed,  no  one  could  feel  more  deeply  for  you  than  he  ;  but  I  am. 
€ure  also  that  that  gentleman,  from  the  large  stake  he  held  in  the  concern, 
felt  confident  that  he  would  ultimately  be  able  to  land  you  in  a  different 
position  from  that  in  which  you  now  are — ('  Oh,  oh,'  laughter,  and  '  How 
about  yourself.*')  1  will  not  stand  here  and  shield  myself  by  saying  that 
I  am  not  guilty,  and  that  all  the  guilt  rests  with  him.  (Cheers.)  *  *  * 
I  did  object  to  any  accounts  being  made  out,  having  found  that  Mr.  Hud- 
son, who  had  anticipated  a  large  increase  of  revenue  from  the  Peterborough 
line — ('Question') — had  miscalculated  the  resources  of  that  line — ('Ques- 
tion ;' and  a  voice :  ' Wliy  don't  you  speak  about  yourself?')  Is  it  not 
the  question — is  it  not  the  vital  question  ? — whether  our  concern  is  earning 
anything  or  not  ?  The  Eastern  Counties  has  paid  its  own  way.  ('  Oh.') 
If  you  will  not  hsten  to  me — if  you'll  not  hear  me — ('  No.')  Very  well, 
gentlemen,  take  your  own  course,  I  will  endeavour  to  do  my  duty.  If  you 
will  not — (Cheers,  'oh,'  and  groans) — if  you  will  not  listen  to  the  state- 
ment, I  have  no  wish  to  go  on.  I  ask  you,  as  an  act  of  justice,  to  hear 
me  ('  Hear')  ;  I  claim  it  as  a  right,  but  I  ^11  not  ask  it  as  a  favour. 
(Cheers.)  *  *  *  j  have  not  rehed  on  my  own  figures  in  the  matter ;  I 
am  not  going  into  the  question  with  a  view — (A.  voice,    '  Why  don't  you 


PACTS,  rAILUBES,  AITD  TBAUDS.  57 

leagues  take  a  mere  monetary  view,  in  the  light  of  profit  and 
loss,  of  the  transactions  for  which  they  were  now  held  account- 
clear    your  own  character  ?')       But,  gentlemen — ('  Oh,  oh !  sit  down.') 

*  •  *  The  hon.  gentleman  (tlie  chairman  of  the  committee)  asks  us 
where  the  money  was  to  come  from  ?  That  is  a  question  which  I  suppose 
he  wants  me  to  answer.  ('  Hear,  hear,'  and  *  Yes.')  I  can  only  say  that 
the  dividend  was  arranged  for  payment.  Whether  subsequent  pi'ocecdings 
here  may  hare  prevented  that  arrangement  from  being  carried  out  it  is  not 
for  me  to  say  ;  but  I  repeat,  it  had  been  arranged  for  payment.  ('How  ?*) 
That  is  the  statement  I  have  to  olTer  on  this  point.  ('  How  was  it  to  be 
paid  ?')  I  say  that  arrangements  had  been  entered  into  to  obtain  the  money 
for  the  purpose.  (Several  proprietors :  *  But  how  ?')  Why,  by  borrowing 
the  money.  ('  We  thought  so ;'  laughter,  hisses,  and  groans.)  If  any  gen- 
tleman fancies  that  this  undertaking  can  be  kept  on  without  sustaining  its 
credit  and  borrowing  money,  he  is  much  mistaken.  (Renewed  laughter, 
'  Sit  down.')  I  don't  want  to  disguise  the  facts.  (*  Oh,  oh.')  You  shall 
know  them.  I  will  not  disguise  anything  now,  though  wo  might  have 
done  so  before.  ('  Yes.')  In  the  estimate  which  has  been  commented  upon 
by  Mr.  Meek,  he  says,  *  we  threw  out  a  bait  to  the  shareholders.'  I  deny 
it.  (*  Oh,  oh.')  What  is  the  meaning  of  the  term 'bait  ?'  (A  laugh.) 
It  was  our  duty  to  give  you  an  account  of  what  we  thought  you  had 
realized,  and  so  we  did.  With  all  due  deference  to  the  committee,  I  don't 
wish  to  impute  to  them  motives.  ('  Oh,  oh.')  I  am  not  doing  so.  *  *  * 
I  will  not  speak  of  Mr.  Meek's  courtesy.  I  ask  no  courtesy  from  him,  but 
I  do  question  the  policy  of  making  this  meeting  the  medium  of  running 
down  any  man,  be  he  chairman,  director,  or  shareholder.  (*  Oh,  oh,'  and 
hisses.)  Qentlemen,  if  you  have  patience,  I  will  trouble  you  for  only  a 
very  few  minutes,  and,  as  this  is  probably  the  last  time  I  shall  have  the 
honour  of  addressing  you — (tremendous  cheering) — I  hope  you  will  grant 
me  a  very  small  portion  of  your  time.  •  •  •  Now,  gentlemen,  much  has 
been  said  respecting  the  i'2000.  I  know  that  a  resolution  was  passed,  and 
I  know  that  I  received  the  money.     (Loud    hisses   and  cries  of  'Oh.') 

•  •  *  Previous  to  their  appearing  in  that  room  this  day  the  board  had 
come  to  the  unanimous  resolution  that  they  would  resign— (cheers) — and  he 
(Mr.  W.)  now  offered  the  proprietors  their  resignation."  (Renewed  cheers.) 
Amidst  the  uproar  that  followed  this  announcement,  Mr.  Owen  moved,  and 
Mr.  Lowe  seconded,  "  Tliat  a  criminal  information  be  laid  against  Mr. 
Hudson,  and  abo  that  a  Bill  in  Chancery  be  Cled  against  Mr.  Waddinglon 
and  all  the  Directors  of  the  Eastern  Counties  Railway."  The  motion,  how- 
ever was  not  put.  Mr.  Waddington  and  his  colleagues  retired  amidst  the 
hootings  of  the  shareholders,  and  an  indescribable  scene  of  uproar  and  con- 
fusion ensued. 


58  TACTS,   FA1IT7RES,    A'SD   mATIDS. 

able,  that  the  one  vital  question  was  conceived  by  them  to  be, 
whether,  taking  their  operations  all  in  all,  the  company  hr.d 
not  been  benefited  by  their  administration,  and  was  not  in  a 
far  more  creditable  position  than  could  otherwise  have  been 
expected.  The  financial  power  of  Mr.  Hudson  had  been 
hitherto  regarded  with  a  kind  of  enthusiasm,  and  the  whole  of 
the  directors  sought  refuge  under  his  shadow.  Mr.  Wadding- 
ton,  when  craving  attention  at  the  commencement  of  his 
speech,  had  told  the  shareholders  that  before  he  sat  down  they 
would  thank  him  for  having  risen ;  and  now,  in  face  of  the 
report  of  the  committee,  which  condemned  the  management 
and  showed  its  effects,  he  came  out  with  the  statement  that 
the  dividend  was  arranged  for  payment ;  whether  subsequent 
proceedings  had  prevented  that  arrangement  from  being  carried 
out,  it  was  not  for  him  to  say.  In  answer  to  cries  of  "  How?" 
"But  how?"  "How  was  it  to  be  paid?"  Mr.  "VYaddington 
replied — "  "Why,  by  borrowing  money ! "  And  amidst  laughter, 
hisses,  groans,  imprecations,  and  shouts  of  "We  thought  sol" 
Mr.  Waddington  added — "  If  any  gentleman  fancies  that  this 
undertaking  can  be  kept  on  without  sustaining  its  credit  and 
borrowing  money,  he  is  much  mistaken."  The  resignation  of 
the  board  was  then  tendered  and  readily  accepted,  and  the 
subsequently  enacted  scena  proved  Hudson's  star  had  set — 
that  henceforth,  to  his  adorers,  he  must  be  a  deus  ex  macMnd. 

The  last  accounts  Mr.  Hudson  presented  to  the  general 
meeting  of  the  Eastern  Counties  exhibited  £103,687  as  net 
profit;  but  this  was  effected  by  placing  £97,364  to  capital 
which  ought  to  have  been  charged  to  ciurent  expenses,  so  that 
the  real  balance  was  only  £6323,  a  snm  too  small  for  any 
dividend.  Of  the  sum  of  £97,364  thus  improperly  charged, 
£64,478  was  for  expenses  connected  with  previous  periods, 
and  hence  the  actual  earnings  might  stiU.  be  considered  as 
showing  a  dividend  of  3s.  4d.,  which,  though  no  improvement 
prior  to  Mr.  Hudson's  accession  to  office,  was,  in  view  of  the 


TACTS,   TAILLEZS,   A^TD   FEArDS.  59 

circximstaiices  in  which  the  Eastern  Counties  with  other  rail- 
ways was  then  placed,  somewhat  favourable.  Of  other  special 
transactions  evolved  by  the  Hudsonian  policy,  the  report  of 
the  committee  spoke  plainly  enough : — 

"  In  their  preliminary  remarks  the  committee  mention  that  they 
commenced  their  investigation  from  January,  1S45,  iihen  the  capital  was 
£2,906,780,  which  has  since  been  increased  to  a  nominal  sum  of  £13,139,156. 
They  deplore  that  a  epirit  of  hostility  has  been  shown  by  the  Eastern  Union 
Company,  and  intimate  that  the  Harwich  Steam-packet  Company  will  not 
require  any  money  by  way  of  loan.  Referring  to  the  Northern  and  Eastern 
line,  they  propose  that  the  directors  of  that  line,  who  are  also  on  the 
Eastern  Counties  board,  should  receive  pay  only  from  one  company.  The 
purchase  of  the  St.  Ives,  March,  and  "Wisbeach  line  is  characterized  an  an 
unfortunate  transaction,  and  it  is  recommended  that  no  expenditure  should 
be  incurred  for  its  extension  ;  considerable  loss  is  also  mentioned  from  the 
unwise  agreement  for  renting  warehouses  of  the  East  India  Deck  Company. 
Southend  pier,  which  was  purchased  for  £17,000,  is  recommended  to  be 
sold,  as  there  is  now  no  reason  to  expect  a  railway  will  bo  made  to  it.  Un- 
justifiable extravagance  is  pronounced  to  have  taken  place  in  tlie  erection 
of  stations,  etc.,  for  joint  occupation  with  other  companies.  As  regards 
the  contemplated  amalgamation  with  the  Korfolk  Company,  the  committee 
unanimously  recommend  that  it  should  be  effected.  In  relation  to  the 
Newmarket  and  Chesterford  Company  they  think  an  arrangement  mutually 
satisfactory  may  hereafter  be  made.  With  respect  to  past  management  the 
committee  report  that,  as  far  as  their  observation  goes,  the  conduct  of  the 
affairs  of  the  company  nndcr  Mr.  Bosanquet,  from  the  date  of  its  formation 
in  1835  up  to  his  retiremf  nt  in  1845,  presents  no  ground  for  disapproval. 
The  last  dividend  paid  under  those  circumstances  was  3;.  per  share,  which 
in  the  opinion  of  the  committee  was  fairly  earned.  In  the  last  half-year 
of  18-15  Mr.  Hudson  joined  in  the  direction.  He  stipulated  for  the  entire 
control;  subsequently,  however,  ogreeing  that  Mr.  Waddington  should 
have  the  managcmeiit  of  the  traffic  department.  On  the  22nd  of  December, 
1845,  it  was  resolved  to  pay  a  dividend  of  9«.  per  shore.  The  half-year's 
account  extended  up  to  the  10th  of  January,  and,  of  course,  therefore,  at 
this  time  they  could  not  have  been  made  up  ;  and  it  is  not  only  in  evidence 
that  the  whole  thing  was  arranged  without  any  reference  whatever  to  the 
accounts,  but  also  that  when  the  accounts  were  made  up  they  did  not  show 
that  any  such  dividend  had  been  earned ;  that  the  trafllc  accounts  were 
MQsequently  altered  to  suit  the  circumstances ;  that  in  every  succeeding 
year  the  same  system  has  been  pursued  ;  and  that  it  now  appears  that  out 
of  £545,714  8t.  4d.  distributed  in  dividenda  from  the  4th  of  January,  1815, 


60  FACTS,  FAILURES,   AlfD   FEAUDS. 

to  the  4th  of  July,  1848,  £115,278  8s.  5d.  was  procured  by  the  alteration 
of  traffic  accounts,  and  £205,294  'is.  6d.  by  improper  charges  to  capital 
account,  thus  mating  a  total  of  £320,572  15^.  lOd.,  which  was  not  appli- 
cable to  diyidends  at  all.  Consequently,  out  of  £545,714  actually  divided, 
only  £225,141  was  the  amount  that  had  been  earned.  Various  other  items 
together  with  Parliamentary  expenses,  etc.,  of  £9606  175.  6d.  have  been 
found  inexplicable  by  the  committee,  and  the  whole  of  which  last  amount, 
■with  the  exception  of  £2000,  Mr.  Waddington  and  Mr.  Duncan  have  stated 
was  disbursed  by  the  company,  through  them,  for  services  rendered,  and  ia 
a  manner  *  which  did  not  leave  them  at  liberty  to  give  particulars  without 
implicating  other  parties.'  The  £2000  was  given  to  Mr.  Waddington  for 
services  rendered  to  the  company,  but  the  committee  have  been  unable  to  find 
any  resolution  of  the  board  to  that  effect.  The  result  of  the  management 
of  the  company,  it  is  stated,  has  been  to  place  it  almost  exclusively  in  the 
hands  of  Mr.  Hudson  and  Mr.  Waddington,  and  the  committee  conclude  by 
remarking  that  as  regards  the  way  in  wliich  the  power  has  been  exercised 
by  the  former  gentleman,  the  statements  they  have  given  will  reheve  them 
from  the  necessity  of  characterizing  it.  In  connection  with  the  present 
position  of  the  undertaking,  the  effect  of  a  payment  of  dividends  out  of 
capital  and  of  a  reckless  expenditure  must  now  be  looked  at  j  but  however 
disproportioned  to  its  value  is  the  sum  already  expended,  considerable 
additions  to  that  sum — perhaps  to  the  extent  of  £500,000 — must  be  made 
before  the  capital  account  is  closed.  The  immediate  point  of  interest  is 
the  true  state  of  the  working  account  for  the  past  half-year.  That  account, 
as  presented  to  the  recent  general  meeting,  exhibited  £103,687  as  net 
profit ;  but  this  was  effected  by  placing  £97,364  to  capital  account,  which 
ought  to  have  been  charged  to  cuiTcnt  expenses,  so  that  the  real  balance 
was  only  £6323 — a  sum  too  small  for  any  dividend.  Of  the  sum  of 
£97,364  thus  improperly  charged  to  capital  account,  £64,478  was  for 
expenses  connected  with  previous  periods — so  that  the  actual  earnings  of 
the  half-year  may  still  be  considered  to  show  a  dividend  of  3s.  4rf.  In 
treating  of  future  prospects,  the  committee  recommend  immediate  steps  to 
ascertain  and  settle  all  claims  and  to  close  the  capital  account,  also  a  reduc- 
tion of  the  number  of  directors  to  twelve,  a  pi'ovision  for  the  efficient  audit 
of  accounts,  the  appointment  of  a  law  clerk  at  an  annual  stipend,  the  taxing 
of  all  law  bills  at  present  unsettled,  a  diminution  in  the  speed  of  the  goods' 
trains,  a  reduction  of  the  passenger  trains  in  the  purely  agricultural  dis- 
tricts, and  the  exercise  of  a  general,  but  not  too  hasty,  economy  throughout 
the  establishment.  In  a  postscript  the  committee  report  a  circumstance 
which  seems  only  to  have  transpired  at  the  last  moment  of  their  investi- 
gation— namely,  the  payment  of  a  sum  of  £2000  to  Mr.  Hudson,  and  of 
£2000  to  Mr.  Waddington,  in  connection  with  a  purchase  of  scrip  of  the 
Wisbeach,  St.  Ives,  and  Cambridge  line, '  for  which  no  scrip  could  be  found," 


TACTS,   rAILITRES,   AND   FBAUDS.  61 

and  for  which  the  committee  hare  not  been  able  to  ascertain  that  any 
other  authority  existed  than  that  given  to  Mr.  Honey,  the  secretary,  by 
Mr.  Iludson  and  Mr.  Waddington  themselves. 

"  The  list  of  witnesses  comprises  M.  Davis,  the  accountant,  who  testifies 
to  receiving  back  his  accounts  in  an  altered  state,  and  that  he  had  '  no  al- 
ternative but  to  obey  his  instructions  and  to  adopt  them ;'  Mr.  Owen,  the 
deputy-accountant,  who  says,  '  it  was  a  generally  understood  thing  that 
capital  was  to  bear  what  revenue  would  not,'  and  who  '  does  not  remember 
any  account  from  December,  1816,  to  July,  1848,  which  did  not  come  back 
from  the  directors  altered  so  as  to  increase  the  apparent  sum  applicable 
for  a  dividend  ;'  Mr.  Honey,  the  secretary,  who  states  that  the  Examining 
Committee  in  July,  1848,  were  Messrs.  Iludson,  Waddington,  Paterson, 
Gibbes,  and  Bouth,  but  that  'these  gentlemen  never  met  as  a  body- 
Mr.  Hudson  and  Mr.  Waddington  did  meet ;'  Mr.  Hudson,  M.P.,  who 
« cannot  charge  his  memory'  with  the  alterations  made  by  the  directors, 
and  who  feels  '  the  company  were  justified  in  putting  a  certain  amount  to 
capital,  or  leaving  it  to  be  discharged  on  future  years  of  success ;'  Mr. 
"Waddington,  M.P.,  who  states  that  'the  course,  with  reference  to  the 
revenue  accounts,  was,  that  the  account  was  made  out  from  the  books,  and 
given  to  Mr.  Hudson,  he  directing  that  certain  items  should  be  altered  ; 
Mr.  Eobert  Mosely,  the  traffic  manager,  who  last  July  *  was  directed  by 
Mr.  Hudson  to  tell  them  at  the  office  to  carry  £10,000  to  the  ensuing  half- 
year  ;  that  is  to  say,  to  make  the  expenditure  in  the  printed  report  £10^000 
less  than  was  actually  incurred ;'  and  who,  on  receiving  the  accounts  from 
Mr.  Waddington  to  take  to  Mr.  Hudson,  was  told  by  Mr.  Waddington 
•Now,  mind,  Mr.  Mosely,  I  shall  be  no  party  to  the  cooking  of  those 
accounts ;'  Mr.  John  Duncan,  the  solicitor  to  the  company,  who  states 
that  in  1845,  when  the  dividend  of  9*.  was  decided  upon,  '  no  accounts  had 
been  prepared,'  and  who  declines  to  give  particulars  regarding  the  specific 
amount  paid  for  Parliamentary  expenses,  as  he  'cannot  do  so  without 
implicating  other  parties  ;'  Mr.  Richard  Paterson,  a  member  of  the  *  finance 
committee,'  to  which  committee  the  accounts  were  never  presented ;  Mr. 
Thomas  Gibbes,  another  member  of  the  same  committee,  who  says  that 
'  the  chairman  dealt  with  the  accounts  as  ho  thought  proper,'  and  who  has 
'no  recollection  of  £9000  having  been  paid  for  secret- service  money,' 
but  who  '  presumes  if  such  payments  have  been  made  it  was  done  to 
farther  the  interests  of  the  company ;  and  finally,  Messrs.  Reeves  and 
Bctts,  the  auditors,  who  'when  they  came  to  examine  the  capital  account, 
found  that  no  single  item  agreed  with  the  ledger,'  and  who,  upon  being 
informed  by  the  accountant  that  the  accounts  had  been  altered  by  the 
direction  of  the  chairman,  refused  to  audit  the  capital  account,  and  entered 
their  protest  against  the  report.  The  names  of  the  committee  by  whom 
this  laborious  investigation  was  conducted  were  Mr.  Cash,  Mr.  Christy, 


62  FACTS,   FAILUEES,    A^D   FEAVDS. 

Mr.  Sherwood,  Mr.  Samuel  Ellis,  Mr.  Mayhevr,  Mr.  Gljnn,  Mr.  Meek, 
and  Mr.  East." 


"VTith  such  statements  circulating  through  the  country,  and 
the  whole  of  the  proprietaries  of  lines  w  ith  which  Mr.  Hudson 
was  connected  demanding  investigation,  it  was  not  surprising 
to  discover  that  his  popularity  was  decaying.  There  were, 
however,  those  who  stUl  professed  strong  allegiance  to  him, 
and  it  was  occasionally  predicted  that  he  would  recover  his 
position.  Much,  it  was  felt,  depended  upon  the  result  of  future 
deliberations  and  the  ultimate  turn  that  the  subsequent  meet- 
ings would  take ;  the  majority,  nevertheless,  who  appreciated 
the  weight  of  the  heavy  and  grave  charges  brought  against  the 
"  Liuendraper  of  Tork,"  entertained  little  hope  of  his  ever 
again  assuming  power  where  he  had  only  just  previously 
exercised  such  unlimited  sway. 

During  the  Eastern  Counties  inquiry,  ISIr.  Hudson  was  sum- 
moned before  the  committee.  "  Never,"  remarks  a  spectator 
of  the  scene,  referring  to  IVIr.  Hudson's  interview  with  the 
committee,  *'  never  since  his  accession  to  his  iron  throne,  was 
the  IMember  for  Sunderland  treated  with  so  little  ceremony." 
*'  George  Hudson,"  said  Mr.  Cash,  the  chairman  of  the  com- 
mittee and  a  member  of  the  Society  of  Friends,  "  wilt  thou 
take  a  seat  ?  As  thou  hast  the  financial  department  of  this 
company  under  thy  especial  control,  thou  art  required  to 
answer  a  few  questions  which  the  committee  will  put  to  thee  ? 
Didst  thou  ever,  after  the  accountant  had  made  up  the  yearly 
accounts,  alter  any  of  the  figures?"  Mr.  Hudson,  in  a 
subdued  tone,  answered,  afler  a  moment's  hesitation,  "  "Well, 
I  may  perhaps  have  added  a  thousand  or  two  to  the  next  ac- 
count." "Didst  thou  ever  add  £10,000?"  continued  Mr. 
Cash.  "  Ten  thousand !  that  is  a  large  sum."  "  It  is  a  large 
sum,  and  that  is  the  reason  wliy  I  put  the  question  to  thee. 
Wilt  thou  give  the  committee  an  answer,  yea  or  nay  ?"     IMr. 


FACTS,  TAILV BXSy  ASH  FSATTCS.  63 

Hud5on,  in  a  rery  subdued  tone,  and  eridently  much  embar- 
rassed replied — "  I  cannot  exactly  say  what  may  have  been 
the  largest  sum  I  carried  to  the  following  account."  "  Perhaps, 
George  Hudson,  thou  couldst  inform  the  committee  whether 
thou  ever  carried  to  the  next  accoimt  so  large  a  simi  as 
£40,000?"  **0h,  I  should  think  not  so  large  a  sum  as 
that!"  "But  art  thou  quite  sure  thou  never  didst ?"  Here 
again  the  deposed  monarch  of  the  railway  kingdom  showed 
considerable  embarrassment,  on  which  his  Quaker  inquisitor 
did  uot  further  press  the  question  ;  and  putting  the  interroga- 
tories upon  a  sheet  of  paper,  into  his  hand,  observed,  with  a 
dry  nonchalaBce  which  must  have  been  very  annoying  to  the 
former  chairman  of  the  company — "  George  Hudson,  take  the 
questions  home  with  thee,  and  send  written  answers  to  the 
committee  at  thy  earliest  convenience."  It  was  observed  that 
from  this  time  there  was  a  marked  change  in  the  manners  and 
the  appearance  of  Mr.  Hudson.  Formerly,  even  his  colleagues 
in  the  directorship  were  afraid  to  speak  to  him ;  but  now  he 
was  all  humility,  mildness,  and  docility ;  willing  to  answer  any 
question  and  to  do  anything  he  was  respectfully  required. 

The  disclosures  that  had  been  made  necessarily  excited 
universal  attention,  and  it  was  impossible  but  that  Mr.  Hudson's 
political  position  should  be  compromised.  On  the  evening  of 
May  17,  he  rose  in  his  place  in  the  House  of  Commons,  during 
the  time  of  private  business,  on  the  presentation  of  two  peti- 
tions, relating  to  the  concerns  of  the  Eastern  Counties  Kail- 
way,  and  entered  into  explanations  respecting  the  course  he 
had  pursued  in  connection  with  that  undertaking.  From 
the  silence  with  which  his  obsenations  were  received,  it  was 
evident  tlaat  he  had  been  already  judged.  Nor  could  the 
public  at  large  enter  into  the  prospective  views  he  had  enter- 
tained, or  consider,  in  the  way  of  qualification,  the  ultimate 
workings  of  the  system  of  combination  he  had  so  extensively 
adopted.    They  had  to  deal  with  the  then  position  of  the  com- 


G4  TACTS,   FAILUBES,   AND   rEAUDS. 

panies,  and  with  the  balance  of  accounts  that  had  been  struck. 
Thenceforth  Mr.  Hudson  had  no  resort  but  in  that  privacy 
from  which  in  1833  he  had  emerged,  and  no  safety  but  in 
making  large  and  ample  restitution. 

According  to  the  reports  furnished  by  the  several  com- 
mittees of  investigation,  who  examined  Mr.  Hudson's  trans- 
actions in  connection  with  the  railways  of  which  he  was  chair- 
man, he  was  held  indebted  in  the  sum  of  more  than  half  a 
million  pounds.  This,  however,  included  sums  which  he 
merely  temporarily  held  for  the  discharge  of  past  obligations, 
or  to  cover  prospective  arrangements  on  behalf  of  the  com- 
panies for  whom  he  acted,  also  the  value  of  shares  which  had 
been  voted  him  by  his  co-directors,  and  the  still  larger  number 
which  he  had  distributed  to  those  whom  it  was  thought  neces- 
sary to  conciliate  or  reward  for  the  furtherance  of  various 
enterprises.  Even  before  the  reports  were  published,  a  large 
amount  of  the  sums  thus  held  had  been  repaid,  and  he 
endeavoured  to  make  arrangements  for  satisfying  the  further 
claims.  Appended  are  the  various  principal  items  exhibited  in 
the  form  stated : — 

£        s.  d. 

Great  ^S'ortli  of  England  Purchase  Account    ....  11,292  10  0 

East  and  West  Eiding  Shares      96,000    0  0 

Money  belonging  to  Landowners     26,000    0  0 

Contractors     42,479  13  7 

North  British  Money     62,267  14  3 

Iron  Bails   66,203  12  11 

Interest  on  two  Bonds,  Bank  of  England   1,747    4  5 

Sunderland  Docks    41,000    0  0 

Profit  on  Berwick  Shares 149,704    0  0 

Brandling  Junction     42,000     0  0 

Hull  and  Selby  Purchase  Shares 42,000    0  0 

Difference  to  return  for  Land  at  Londesborough  18,090    0  0 


Total,    £598,784  35    2 


FACTS,    FAILUBES,    AND   FIIAUDS.  G5 

Large  as  this  sum  was,  it  did  not  approach  in  the  sliglitest 
degree  the  losses  that  had  been  incurred  through  misrepre- 
sentations in  published  accounts,  the  irregular  transactions  in 
purchases  and  amalgamations,  and  declarations  of  unwarranted 
dividends,  by  which  future  proprietors  had  been  subjected  to 
the  greatest  injury.  Thus,  in  the  case  of  one  company,  moro 
than  a  third  of  a  million  pounds  had  been  distributed  within 
three  years  in  the  form  of  realized  profit,  which  was  not  ap- 
plicable to  dividend  at  all,  which  had  not  been  earned,  and 
which  was  only  to  be  carried  by  improper  charges  to  capital  and 
the  doubtful  re-arrangement  of  traffic.  Then  arose  the  huge 
cry  respecting  the  position  of  capital  accounts,  which  raised 
a  newspaper  controversy  and  a  pamphlet  warfare  which  has 
scarcely  subsided  at  the  present  day. 

Meanwhile  many  claims  were  raised  against  him,  and  not- 
withstanding, much  to  his  credit,  he  repaid  large  sums  and 
made  arrangements  for  others,  such  was  the  spirit  of  hostility 
exhibited,  that  every  conceivable  method  was  attempted  to 
crush  the  last  vestige  of  his  popularity.  The  public,  and, 
above  all,  the  most  needy  speculators — those  who  had  profited 
by  his  advice,  and,  not  content  with  first  profits,  had  continued 
their  operations  throughout  the  career  of  the  crisis,  until,  like 
the  common  gamester,  they  had  staked  their  last  farthing  and 
lost — were  now  prepared  to  hound  down  to  the  death  the  indi- 
vidual whom  before  they  had  lauded  to  the  skies  as  the  veritable 
man  of  the  age,  the  resuscitator  of  industrial  prosperity  and 
the  most  successful  finaucer  of  the  century.  Upon  a  sensitive 
mind,  like  that  possessed  by  Hudson,  this  severe  revulsion  told 
with  wondrous  eflfect ;  his  non-appearance  at  the  Eastern 
Counties  meeting,  the  absence  of  satisfactory  explanations 
pending  any  of  the  inquiries  that  were  going  forward,  apart 
Irom  a  domestic  calamity,  which  was  said  to  be  traceable  to  the 
linal  ill  success  of  his  career,  seeming  to  give  a  finishing  stroke 
to  a  popularity  earned  tiirough  the  exercise  of  much  vigilance 

r 


66  TACTS,  FAiLUUES,  a:s^d  fEArcs. 

and  laborious  exertion,  but  unfortunately  alloyed  with  a  large 
amount  of  deception.     His  sudden  decadence  brought  with  it 
consequences  which  appeared  to  testify  the  truth  of  the  old 
philosophy,  that  "  when  a  man  is  down,  he  has  few  friends ;"  and 
sorely  must  have  he  been  tried  under  the  circumstances.     It 
was  pitiable  indeed  to  notice  the  rapid  alteration  in  the  robust 
appearance  and  the  rotund  form  of  the  great  railway  magnate 
a  few   months  after  these  discoveries,  and  although  he   evi- 
dently endeavoured,  with  the  natural  force  of  his  character, 
to  brave  out  the  mighty  hostilities  waged   against  him,  the 
proof  was  there  in  the  individual  that  they  were  not  without 
strong  influence  upon  his  constitution.     A  Hercules  in  mind 
and  body  he,  nevertheless,  must  have  been  to  have  stood  out  the 
storm  that  raged  around  him.     A  massive  pillar,  as  he  was,  cen- 
tered in  himself,  but  yet  keenly  susceptible  of  external  in- 
fluences he  was  tormented  by  every  contending  element.     Ar- 
raigned in  Parliament,  defendant  in  several  suits  in  equity,  dis- 
carded and  frowned  upon  by  old  associates,  he  was  placed  in 
such  a  position  as  had  never  been  witnessed  since  the  days  of 
disgrace  in  the  history  of  the  South  Sea  bubble  ;  and,  to  add  to 
the  contumely  which  was  endeavoured,  with  almost  unabated 
eagerness  to  be  thrust  upon  him,  the  perils  of  a  public  bank- 
ruptcy were  for  months — nay,  nearly  a  year — staring  him  in  the 
face.*      To  the  possessor  of  Albert  Gate,  that  princely  and 
palatial  residence  which  soon  passed  from  his  hands  to  that  of  the 
French  Ambassador;    to   the  occupier  of   enormous    landed 
estates,  which  were  presently  to  be  sold  to  recoup  the  funds 
displaced  by  his  irregularities,  and  to  one  who  was  fairly  estima- 
ted to  have  accumulated  jiroperty  of  the  value  of  at  least  a 
million  and  a-half  sterling,  a  revulsion  of  this  character  could 
but  be  almost  insupportable.   He  nevertheless  sustained  himself 

*  It  will  be  well  remembered  that  this  was  the  fact,  and  that  bill  trans- 
actions, siibsequentlj  disclosed  in  other  case?,  showed  to  what  desperate 
straits  he  had  been  driven. 


TACTS,    PAILUEES,    AND   TKAUDS.  67 

with  au  apparent  amount  of  fortitude  whicli  was  truly  astonish- 
ing, and,  except  to  those  personally  acquainted  with  him,  almost 
passing  belief. 

For  brief  periods  he  sojourned  on  the  Continent,  making 
occasional  trips  for  the  benefit  of  his  health;  but  he  never,  until 
afler  the  whole  of  the  investigations  were  concluded,  entirely 
absented  himself,  but  was  seen  at  the  West  End  and  in  the 
City,  emulating,  with  bustling  activity,  notwithstanding  the 
ponderous  nature  of  his  person,  the  energy  and  vigour  of 
much  more  youthful  men.  Indeed  his  visits  to  the  City,  par- 
ticularly to  the  neighbourhood  of  the  Stock  Exchange,  were 
alleged  to  be  allied  with  speculative  transactions,  and  those  on 
a  scale  of  magnitude  which  it  was  afSrmed  brought  consider- 
able profit.  So  closely  did  he  identify  himself  with  this  pur- 
suit, during  the  transaction  of  some  of  the  investigations,  that 
it  was  vindictively  asserted  by  some  of  those  whose  opposi- 
tion— whether  well-founded  or  not,  is  a  difficult  problem  to 
solve — never  experienced  the  slightest  mitigation,  that  he  "  fol- 
lowed the  market  even  to  its  lowest  point,"  being  fully  aware 
of  what  the  issue  of  the  several  revelations  would  be. 

"  Whether  Mr.  Hudson,"  remarks  the  Commercial  JReghter 
of  1849,  "  did  speculate  on  the  issue  of  his  own  character,  has 
never  been  satisfactorily  proved ;  but,  at  all  events,  it  is  clear 
that  the  bargains  transacted  involved  an  enormous  amount 
of  differences  to  be  settled  on  the  various  account-days,  and 
that  such  description  of  stock-exchange  gambling  far  exceeded 
the  operations  concluded  for  actual  transfer."  This  question  is 
a  highly  interesting  one,  even  when  regarded  only  in  a 
speculative  point  of  view,  in  relation  to  a  character  whose 
scheming  propensities  w  ould  seem  to  have  been  based  upon 
desperate  eventualities.  If  such  were  the  case,  it  would 
be  difficult  to  conclude  otherwise  than  that  bis  higher 
qualities  had  stagnated,  and  that  his  paramount  principle  of 
action  did  little  honour  to  his  heart.    It  is  to  be  hoped,  how- 


G8  TACTS,.    TAILUKES,    AND    TEAUDS. 

ever,  that  such  ■was  not  the  case,  and  though  he  might  have 
operated  as  is  fully  believed,  it  might  possibly  be  ia  connection 
■with  other  views  than  those  which  vrere  supposed  to  guide  his 
conduct. 

Many  persous  seem  to  consider  that  Mr.  Hudson  had  a 
singular  immunity  from  criminal  if  not  civil  proceedings  ; 
but  the  latter  were  prosecuted  with  benefit  to  the  companies 
while  the  former  would  have  been  attended  with  risk,  and 
might  probably  have  failed.  But  the  low  state  of  financial 
morality  induced  by  the  speculation  in  railways  to  which  all 
classes  had  more  or  less  abandoned  themselves,  served  in  a 
manner  to  protect  him,  together  with  a  sentiment  still  pre- 
valent as  to  the  difierence  to  be  drawTi  between  acts  performed 
in  an  official  capacity,  in  and  for  the  assumed  interest  of  com- 
panies, and  an  independent  transaction  touching  no  otlier 
than  individual  interests.  A  full,  true,  and  explicit  statement 
and  balance-sheet,  detailing  expenses,  receipts,  obligations, 
and,  profits,  if  any,  was  hardly,  it  was  felt,  to  be  expected ; 
and,  possibly,  no  complete  exposition  would  ever  have  come  to 
light,  but  for  the  extreme  depression  that  followed  immediately 
on  an  undue  enhancement.  The  misgiving  on  the  part  of  the 
public  blew  to  the  winds  the  calculations  of  the  best  managers. 
Hudson  had  good  hopes  of  making  all  his  investments  per- 
manently remunerative.  He  had  plans  yet  to  be  matured, 
expenses  to  be  reduced,  large  traffic  to  draw  from  rivals  .and 
the  development  of  resources  already  possessed,  and  profitable 
contracts  to  fulfil. 

An  appeal  may  be  said  to  have  been  taken  from  the  verdict 
of  the  public  by  the  citizens  of  York,  at  a  banquet  given  by 
them  to  Mr.  Hudson,  attended  by  some  of  the  most  dis- 
tinguished gentlemen  of  the  city  and  county.  The  Mayor  of 
York  presided,  and  on  proposing  the  health  of  Mr.  Hudson, 
availed  himself  of  the  occasion  to  take  a  retrospective  view  of 
his   services  throughout  the   period   sketched.     The  railway 


FACTS,    FAILUBE8,   AKD   FBAUDS.  GO 

eicitemeut  had  now  subsided  iuto  a  healthful  and  energetic 
course  of  persevering  eflbrt  to  improve  the  prospects  of  the 
lines  it  had  called  into  existence,  and  leisure  had  been  afforded 
to  trace  the  direct  and  indirec-b  influence  exerted  by  these 
enterprises  on  every  department  of  industry  and  branch  of 
commerce.  IVIr.  Hudson  was  credited  with  an  amount  of 
prescience,  sufficient,  had  it  been  confirmed,  to  have  estab- 
lished his  reputation  as  a  prophet.  But  the  views  and  antici- 
pations expressed  from  time  to  time  by  Mr.  Hudson,  and 
which  liad  the  effect  of  maintaining  impressions  on  the  part  of 
the  public  out  of  which  it  was  designed  that  capital  should  be 
made,  had  proved  generally  delusive,  and  were  entitled  to  no 
higher  rank  than  those  promising  suggestions  by  which  the 
members  of  any  enterprise,  resting  on  precarious  foundations, 
are  apt  to  stimulate  one  another's  flagging  zeal,  or  encourage 
one  another's  boundless  aspirations.  The  public  were  dis- 
posed to  view  this  demonstration  as  an  endeavour,  on  the  part 
of  the  good  people  of  York,  to  burnish  to  its  former  splendour 
an  idol  they  could  not  yet  bring  themselves  to  throw  down. 
The  speeches  delivered  on  this  occasion  countenanced,  to  some 
extent,  this  impression ;  but  they  did  not  produce  the  desired 
effect. 

The  wisdom  of  the  policy  of  amalgamation,  which  Mr. 
Hudson  adopted,  has  since  been  justified  on  the  material 
evidences  of  prosperity  which  have  attended  the  working  of 
the  system.  At  the  present  point  of  organization,  the  rail- 
way companies  of  Great  Britain,  although  still  contending 
with  multifarious  and  divided  interests,  are  able  to  distribute, 
yearly,  upwards  of  nine  million  pounds  in  the  form  of  dividend, 
and  upwards  of  three  million  pounds  in  interest  on  debts. 
This  sum  would  seem  to  afford  a  fair  per  ccntage  on  the 
£288 ,000,000  actually  spent  on  railway  works,  though  when  we 
add  to  this  amount  the  £27,000,000  expended  on  preliminary 
arrangements,  the  per  centage  is  sensibly  reduced.     Eailway 


70  TACTS,    rAILUEES,    AI\D    FEAUDS. 

property  may  yet  be  considered  as  labouring  under  undue  de- 
pression; and  there  is  reason  to  believe  that  as  soon  as  tlie 
principle  is  found  on  which  more  eflFective  co-operation  can  be 
secured,  a  much  more  ample  return  will  be  afforded.  After 
emerging  from  a  period  in  which  conflicting  claims  and  rival 
projects  were  determined,  not  on  their  own  merits,  but  according 
to  the  political  influence  wielded  by  separate  companies,  or  by 
the  amount  of  support  which  the  unenlightened  enthusiasm 
of  the  public,  stimulated  by  fictitious  statements  of  accounts 
on  the  guaranteeing  line,  might  chance  to  furnish,  the  repre- 
sentatives of  the  railway  interest  are  now  seeking  some  means 
of  mutual  arbitration,  or  rather  some  principles  for  general 
guidance.  It  is  not,  however,  in  the  mere  settlement  of 
quarrels  between  themselves,  in  the  ingenious  adjustment  of 
ai'tificial  regulations,  or  the  happy  conduct  of  intricate  nego- 
tiations that  full  development  will  be  attained.  These 
companies,  or  at  least  their  managers — for  certain  of  the  share- 
holders are  appealing,  through  the  press,  to  common  sense 
and  the  results  of  past  experience  to  enforce  intelligent  action — 
would  seem  to  have  yet  to  learn  what  Hudson,  in  the  course  of 
his  aggressive  and  defensive  tactics,  never  discovered — that  the 
interests  of  the  public,  so  far  from  being  antagonistic,  coincide 
with  the  true  interests  of  those  concerned  in  carrying  on  these 
undertakings. 

A  curious  observer  of  men  and  manners,  one  whose  know- 
ledge may  in  some  degree  be  relied  upon,  thus  describes  the 
great  and  notable  George  Hudson : — 

"  Mr.  Hudson's  personal  appearance  is  calculated  to  strike 
if  not  absolutely  to  command  attention.  There  is  a  massive- 
ness  in  the  proportions  of  his  bodily  frame,  evidently  hereditary 
in  his  stock,  and  inclining  to  symmetric  development.  His  head 
is  large,  and  scantily  supplied  with  gray  hairs ;  his  forehead 
broad,  and  somewhat  elevated,  The  features  of  his  face,  lighted 
up  with  small  and  somewhat  penetrating  gray  eyes,  might,  from 


TACTS,   FAILUBES,   AND   FEAUDS.  71 

their  severity  of  outline,  convey  to  a  casual  observer  the 
impression  of  harshness  of  disposition.  This  severity,  however, 
is  of  a  purely  mental  character — the  indication  of  a  powerful 
will  acting  on  thoughts  arranged  and  rc-arranged  with  inces- 
sant activity,  or  upon  schemes  either  altogether  ideal  or  rigidly 
practical,  and  long  and  closely  nurtured  and  stimulated  by 
a  vast  range  of  feeling,  which  covers  the  whole  ground  of  his 
sympathies  and  passions.  When  animated  by  conversation, 
or  when  accosted,  his  countenance,  usually  hard  and  rugged, 
relaxes  into  a  pleasing  smile.  While  Mr.  Hudson  strongly 
appreciates  material  conditions,  and  respects,  above  all  things, 
soundness  in  the  subjects  which  engage  his  attention,  he 
is,  on  the  other  hand,  easily  excited  under  sympathetic 
conditions  to  take  an  ideal  view,  which  disposes  him,  when- 
ever the  opportunity  appears  to  be  afforded  of  realizing  his 
aspirations,  whether  these  are  well  founded  or  not,  to  over- 
leap or  set  aside  restrictions  of  a  conventional,  personal,  mate- 
rial, or  even  moral  character,  if  any  of  these  are  in  his  way — 
obstacles  that  would  fill,  for  others,  the  whole  field  of  vision. 
His  strong  hold  of  material  relations ;  his  power  of  particu- 
larizing all  the  minutiae  of  business,  and  of  marshaling,  by 
the  aid  of  memory,  all  the  parts  of  a  complex  organization, 
render  his  services  invaluable  in  the  execution  of  any  design 
depending  on  extensive  co-operation.  His  benevolence,  large 
as  it  is,  works  within  the  sphere  of  his  assumed  interests,  and 
in  favour  of  those  with  whom  he  is  connected  in  the  way  of 
organization.  So  large  are  his  sympathies,  where  the  arrange- 
ment of  a  plan,  or  the  execution  of  any  design  is  concerned, 
that  he  w  ould  sacrifice  to  the  purpose  in  view,  and  for  the  sake 
of  attaining  his  object,  almost  any  personal  consideration.  Aa 
to  any  opinions  Mr.  Hudson  might  form,  or  views  that  he 
might  take,  though  free  to  express  Ihem,  he  would  not  care  to 
argue  them  out.  To  anticipate  any  such  necessity,  he  would 
assume  a  somewhat  dictatorial  air,  and  exhibit  greater  con- 


72  FACTS,    FAILURES,    AIS'J)    FilATJDS. 

fidence  than  lie  would  be  really  entitled  to  coramand.  The 
power  of  organization  he  so  largely  possesses  is  usually  directed 
by  some  standard  of  ideal  perfection.  This  strongly  antici- 
pative  and  ideal  cast  of  mind,  combined  with  practical  ten- 
dencies, serves  with  him  to  beautify  every  object  of  thought, 
and  to  throw  over  every  project  he  entertains  a  marvellous 
degree  of  attraction,  and  wliicli  has  its  own  share  of  influence 
when  he  endeavours  to  impress  his  views  on  others." 

Such  indeed  is  the  man  who  has  become  identified  with 
one  of  the  most  memorable  periods  of  industrial  progress,  who 
aided  materially  to  promote  those  designs  which  were  pre- 
sently seized  upon  and  adopted  in  a  spirit  of  general  enthu- 
siasm ;  who  not  only  extended,  but  fortified,  or  rather  consoli- 
dated, a  portion  of  the  growing  power,  succeeding,  as  far  as  he 
did  succeed,  on  grounds  partly  fictitious  and  partly  real,  and 
failing,  where  he  did  fail — as  in  the  Norfolk  amalgamation — 
not  because  his  schemes  were  inherently  impracticable,  but 
through  not  observing  the  point  at  which  their  further  prose- 
cution was  desirable.  Taking  a  retrospective  glance  at  the 
whole  of  his  career,  there  are  many  features  in  it  deserving 
credit,  while  others  demand  severe  censure.  Another  cycle 
has  passed,  and  his  acts,  contrasted  with  those  of  other  in- 
dividuals, who  have  had  the  management  of  large  public 
corporate  institutions,  bear  no  unfavourable  comparison ;  but 
yet  against  him  must  be  recorded  the  blame  of  having,  through 
his  irregularities,  thrown  the  railway  system  into  such  disorder 
and  embarrassment  as  to  prevent  it  ever  attaining  again  the 
confidence  it  once  held  in  the  estimation  of  the  public ;  and  of 
having  set  the  example  of  systematically  framing  accounts  to 
deceive  the  several  proprietaries  of  which  he  was  the  respon- 
sible and  governing  head.  Once — only  once — was  a  suggestion 
ever  made  to  restore  him  to  power  ;  and  then  the  grouud  was 
tenderly  felt,  as  it  was  well  understood  to  be  a  most  delicate 
proceeding.     The  response,  nevertheless,  conveyed  in  a  very 


TACTS,    FAILUEES,   AND   FEAUDS.  78 

quiet  and  suitable  manner,  sliowed  that  the  public  would  not 
have  tolerated  the  restoration,  and  from  that  time  his  presence 
within  railway  circles  has  scarcely  ever  been  witnessed.  lie 
has,  nevertheless,  mixed  up  in  other  large  speculative  trans- 
actions, foreign  undertakings,  operations  in  iron,  and  similar 
adventurous  schemes,  but  it  is  feared  with  not  a  tithe  of  the 
success  of  his  earlier  career.  "With  a  character  tarnished,  and 
the  loss  of  the  greater  part  of  his  fortune,  a  considerable 
portion  having  gone  to  reimburse  the  several  companies  their 
respective  claims,  he  still  remains  Member  for  Sunderland, 
despite  the  attempts  that  have  been  made  to  obtain  his  resig- 
nation, and  notwithstanding  the  great  "  blot  i'  the  escutcheon," 
he  has  done  the  State  some  service,  and  the  country,  both 
directly  and  indirectly,  though  at  an  enormous  sacrifice,  partial 
but  permanent  benefit. 


74  FACTS,   I'AILUEES,   AND   PEAUDS. 


CHAPTER    III. 

"WALTEB  WATTS    AND   HIS   rEATJDS    TJPON   THE    GLOBE 
ASSUBATS'CE    OmCE. 

The  Age  of  Appearance — Watts's  magnificent  but  brief  Career  — His 
success  as  a  Man  of  Fashion  and  AYealth — His  luxurious  Mode  of 
Life,  alleged  Sources  of  Income  and  Theatrical  Speculations — 
Failure  of  the  Latter,  and  the  Discovery  of  his  gigantic  Frauds — 
The  Investigation  at  the  Globe  Assurance  Office — The  Trial  of  the 
Delinquent,  and  his  Suicide  in  Newgate. 

Ceetainlt  at  no  former  period  of  the  history  of  this  country 
has  so  much  importance  been  attached  to  show,  and  so  little' 
comparatively,  to  substance,  as  at  the  present  time.  If  ia 
private  life  a  man  live  in  a  mansion,  maintaia  a  large  establish- 
ment— servants — an  equipage,  and  all  the  other  outward  ap- 
pearances of  wealth,  few  people  care  much  to  inquire  whether 
or  not  he  possesses  the  reality — credit,  almost  without  limit,  is 
at  his  command,  and  without  question.  He  may,  if  so  disposed, 
make  that  credit,  which  the  gullibility  of  mankind  and  the 
competition  of  trade  offer  to  hiin,  the  means  of  extending  his 
operations  to  any  amount — realizing  the  superfluities  furnished 
to  him  on  such  easy  terms  by  the  too  credulous  tradesman,  to 
meet  the  demands  of  those  who  have  sense  enough  to  prefer 
cash  in  hand  for  their  goods  to  a  long  list  of  names  on  the 
debtor  side  of  their  ledger,  with  heavy  sums  set  against  them, 
uncertain  whether  those  names  represent  persons  of  means 
sufficient  to  cause  at  the  proper  time  the  transfer  of  the  debit 
figures  to  the  other  side  of  the  page.  A  passable  address — an 
adequate  stock  of  cool  assurance — a  tolerable  knowledge  of 
figures — and  an  aptitude  for  ringing  the  changes  in  matters  of 


FACTS,    FAILUBES,   AXD   FUAUDS.  75 

tiuanco — are  all  that  is  necessary.  With  these  a  man  may 
start  aa  a  millionaire,  and  for  a  time  vie  with  the  wealthiest  in 
expenditure,  and  possibly — though,  happily,  for  the  sake  of 
morality,  this  is  the  very  rare  exception— by  some  grand  coup, 
in  the  end  establish  himself  in  the  position  he  has  been  assum- 
ing. This  is  the  goal  which  the  general  class  of  adventurers 
have  probably  always  in  view  when  they  enter  upon  their 
career ;  but  how  few  of  them  ever  reach  it ! 

But  some  do  not  wait  even  to  make  the  experiment  through 
credit ;  they  devise  other  means  to  secure  an  entrance  into 
the  world,  and  their  extravagant  notions  lead  them  to  engage 
in  crimes  wliich,  concealed  for  a  short  period,  enable  them  to 
make  an  appearance,  though  ultimate  discovery  shatters  the 
splendid  fabric  which  they  have  created  only  to  make  their 
decadence  the  more  notorious  and  disastrous. 

It  was  somewhere  about  the  year  1844  that  the  name  of 
"Walter  "Watts  became  associated  with  fashionable  life.  He 
appeared  suddenly,  and  as  suddenly  made  his  presence  felt. 
His  course  was  like  that  of  a  meteor — brilliant  but  brief. 
"Where  he  came  from  nobody  knew.  What  were  his  resources 
nobody  could  ascertain.  It  was  clear  that  they  were  ample  for 
the  gratification  of  the  most  extravagant  tastes.  He  spent  his 
money  like  a  prince.  He  was  naturally  luxurious,  and  fond  of 
pleasure  in  every  form — a  devoted  disciple  of  Epicurus.  He 
was  the  patron  of  art — the  encourager  of  sport,  if  not  of  science. 
At  all  the  theatres  he  was  well  known.  He  had  his  box  at  the 
Opera,  and  the  entree  to  the  sanctum  sanctorum  behind  the 
scenes.  He  addressed  the  coryphees  by  the  affectionate  but 
professional  appellation  "dear,"  and  liberally  atoned  for  his 
familiarity  by  champagne  suppers  after  the  ballet.  With 
prima  donnas  and  dramatic  notabilities  he  was  on  terras  of 
intimacy ;  and  at  one  time  he  was  the  actual  proprietor  of  two 
metropolitan  theatres.  He  kept  an  establishment  in  town  in 
the  most  fashionable  quarter  of  the  West-end,  and  he  had  his 


7G  FACTS,   FATLITRES,   XJfiTi   FRATTDS. 

country  house  at  Brighton,  at  both  of  whicli  he  dispei:seu  a 
princely  hospitality.  He  was  a  connoisseur  in  wines,  and 
stocked  his  cellars  from  the  most  celebrated  vintages — regard- 
less of  price.  He  had  a  decided  peiiclimit  for  gallantry,  and 
spent  much  of  his  time — and,  as  a  matter  of  course,  no  incon- 
siderable sum  of  money — in  the  company  of  that  especial  class 
of  the  fair  sex  who  are  usually  designated  gay.  His  equipage 
was  faultless ;  his  horses  were  the  envy  or  the  admiration, 
sometimes  both,  of  the  habitues  of  Eotten  Eow  ;  and  his  tiger 
was  a  marvel — diminutive,  agile,  clean-limbed,  well  dressed, 
perfect  in  his  knowledge  of  matters  equine,  and  an  adept  in 
that  sang  froid  and  ready  wit,  couched  generally  in  the  most 
modern  slang,  which,  in  this  species  of  the  serving  class,  is 
considered  perfection. 

But  who  was  he  ?  And  what  was  he?  From  what  source  came 
l)is  apparently  inexhaustible  means  ?  The  greater  his  expendi- 
ture, the  more  he  had  to  spend.  '\i\'^as  he  the  heir  apparent  or 
presumptive  to  some  large  landed  estate,  who  was,  for  the  grati- 
fication of  the  moment,  saddling  himself  with  future  liabilities 
in  the  shape  of  post-ohits  ?  Against  this  hypothesis  it  was 
observed,  that  those  who  were  unquestionably  of  "  the  upper 
ten  thousand,"  and  who  are  always  ready,  notwithstanding 
their  habitual  exclusiveness,  to  receive  those  who  are  of  their 
own  order,  whatever  their  extravagances  or  eccentricities,  held 
studiously  aloof  from  him.  The  scions  of  the  aristocracy,  and 
the  junior  representatives  of  the  good  and  wealthy  families,  to 
equality  with  whom  in  point  of  expenditure  he  seemed  to 
aspire,  were  not  among  his  companions.  The  question,  "  AA'ho 
is  he  ?  "  had  not  to  them  received  a  satisfactory  answer.  He 
could  not  have  made  a  fortune  at  Carson's  Creek,  or  at  Balla- 
rat,  for  the  riches  of  California  and  Australia  were  as  yet 
undiscovered. 

Some  said  that  he  was  the  depository  of  certain  State  secrets, 
which  enabled  him  to  operate  with  effect  in  the  public  stocks. 


FACTS,  failuhes,  a-sd  fuauds.  77 

True,  he  was  frequently  in  the  City;  but  there  was  no  proof  of 
frequent  or  extensive  dealings  with  jobbers  or  brokers,  much 
less  were  there  any  such  large  transactions  in  his  name  as  to 
justify  the  supposition  that  Sir  Eobert  Peel  had  confided  to 
him,  for  his  particular  benefit  and  profit,  what  that  prudent  and 
far-seeing  statesman  concealed  from  his  own  party — the  con- 
templated abolition  of  the  corn  laws,  and  the  establishment 
of  free  trade.  -Again,  it  was  hinted  that  Davis,  of  betting 
celebrity,  had  taken  him  by  the  hand,  and  initiated  him  into 
the  art  and  mystery  of  "  making  a  book,"  But  though  he 
moved  to  some  extent  in  sporting  circles,  it  did  not  appear 
that  he  was  a  member  of  Tattersall's,  or  that  he  "  did  business  " 
largely  in  the  "  ring."  He  might  be  occasionally  seen  at  the 
betting-houses,  and  rumour  whispered  that  he  w-as  a  welcome 
customer  at  most  of  them,  though  the  balance  of  profit  and 
loss  in  his  operations  in  that  quarter  was  decidedly  in  favour  of 
the  proprietors  of  those  attractive  establishments,  which  subse- 
quent legislation  has  since,  in  its  capacity  of  guardian  of  the 
morals  of  the  nation,  thought  it  necessary  to  put  down.  That 
he  had  a  City  occupation  was  an  ascertained  fact,  for  regularly 
as  the  morning  came  a  neat  carriage  and  pair,  or  a  brougham 
of  the  most  approved  and  luxurious  build,  conveyed  him  to  the 
neighbourhood  of  Cornhill,  and  there  set  him  down.  It  was 
in  vain  to  search  the  "  London  Directory,"  amongst  the  lists 
of  bankers  and  great  City  merchants,  for  his  name.  It  was  not 
to  be  found.  But  the  curious  inquirer,  who  happened  to  be  in 
Cornhill  or  Leadenhall  Street  when  the  carriage  alluded  to 
drove  up,  might  observe,  if  he  followed  the  occupant  who 
alighted  from  it  for  about  a  couple  of  himdred  yards,  he  would 
see  him  enter  the  Globe  Assurance  Office.  Yes,  "Walter  Watts 
was  an  etnployc  in  that  respectable  institution — not  the  manager 
with  an  income  of  £S00  or  £1000  a-year,  but  a  simple  clieck- 
clerk  in  the  cashier's  department,  with  a  salary  of  something 
like  £200  a-year,  having  been  placed  there  by  the  interest  of 


78  TACTS,    FAILUKES,    AIS'D    PEAUDS. 

Lis  father,  who  for  near  forty  years  had  filled  with  credit  a  com- 
paratively subordinate  position  in  the  same  office. 

But  £200  a-year  would  not  pay  for  young  AVatts's  gloves 
and  cigars,  much  less  his  town-house  and  his  country-house, 
his  carriages  and  horses,  his  opera-box,  his  banquets,  and  his 
hundred  other  sources  of  expenditure,  to  say  nothing  of  his 
theatrical  speculations.  Certainly  not ;  but  then  Walter  Watts 
had  made  a  great  discovery.  He  was  a  young  man  of  great  dis- 
cernment, quick  apprehension,  and  not  over-burdened  with 
moral  principle.  He  found,  in  the  conduct  of  the  financial 
afiairs  of  the  Globe  Assurance  Company,  an  inexcusably  lax 
system,  which  his  ingenious  mind  saw  might  be  made  condu- 
cive to  his  own  pecuniary  profit ;  and,  after  some  short  consi- 
deration, he  proceeded  to  turn  it  to  account.  His  position  gave 
him  access  to  the  most  valuable  of  the  books — the  cheque-books 
and  the  banker's-books  ;  and,  by  a  system  artfully  conducted, 
he  fraudulently  obtained  funds  which,  by  passing  through  his 
own  bankers  lulled  suspicion,  to  the  extent  of  £700,000  ;  and 
was,  after  all,  only  through  a  comparative  accident  discovered, 
though  his  expensive  style  of  living,  and  his  heavy  theatrical  en- 
gagements, which  it  was  well  kno\vn  could  only  be  conducted  at  a 
large  sacrifice,  should  have  long  before  attracted  the  notice  of 
the  directors,  and  led  to  the  proper  and  necessary  investigation. 
The  City  life  of  Walter  Watts  merged  more  in  the  duties  of 
his  oiSce,  where  from  ten  till  four  he  was  supposed  to  be  fol- 
lowing the  ordinary  routine  of  official  responsibility.  His 
attendance,  though  punctual,  involved  no  heavy  labour ;  it  was 
mere  check  work,  which,  from  the  loose  system  adopted,  re- 
solved itself  into  no  check  at  all,  and  consequently  he  had  the 
greater  time  and  opportunity  to  arrange  the  preliminaries  of 
those  frauds  which  he  subsequently  followed  out  with  so  large 
a  share  of  temporary  success.  These  he  no  doubt  at  first 
pex'fected  by  a  slow  and  gradual  process  ;  but  confidence  once 
attained  by  the  ease  with  which  he  arranged  his  malpractices, 


TACTS,   rAILUEES,    AND    FEAUDS.  79 

induced  the  perpetration  of  frauds  whicb,  originally  commenc- 
ing Avith  hundreds  of  pounds,  eventually  terminated  by  turning 
those  hundreds  into  thousands.  His  City  life  over,  he  fre- 
quented his  West-end  haunts,  and  divided  his  attention  between 
sporting  and  other  gay  amusements,  until  he  launched  into  that 
adventurous  career  as  lessee  of  two  theatres,  having  first  adopted 
the  Marylebone,  and  after  the  well-known  "  neat  little  house  " 
in  "Wych  Street. 

Indeed,  the  most  remarkable  part  of  the  career  of  "Walter 
Watts  was  his  connection  with  the  London  stage,  over  which, 
for  a  time,  he  exercised  a  really  important  influence.  Of  the 
drama  he,  it  is  averred,  knew  nothing  whatever,  either  from  a 
literary  or  from  a  practical  point  of  view;  but  to  the  individual 
who  has  a  taste  for  magnificence,  and  is  fond  of  pleasure,  the 
position  of  a  theatrical  manager  will  always  have  its  fascina- 
tions. It  was  impossible  for  a  London  theatre  to  be  more 
obscure  than  the  house  in  Church  Street,  Marylebone,  before 
the  year  1847.  The  building  was  large  and  commodious 
enough,  but  the  neighbourhood  was  and  is  diametrically  op- 
posed to  prosperity.  There  is  a  high  class  which,  if  it  patron- 
izes the  drama  at  all,  visits  the  chief  metropolitan  theatres  in 
private  carriages ;  there  is  a  class  so  low,  that  it  scarcely  has 
money  to  spend  on  the  humblest  pleasures.  But  an  opulent 
middle  class  is  altogether  wanting,  and  it  may  be  taken  as  a 
maxim,  that  in  the  absence  of  persons  answering  this  descrip- 
tion, the  success  of  a  suburban  theatre  is  altogether  hopeless. 

In  the  autumn  of  1847,  however,  the  Marylebone  Theatre 
was  suddenly  raised  into  celebrity  by  the  announcement  that 
it  would  be  opened  for  the  performance  of  the  "  legitimate " 
drama,  under  the  management  of  Mrs.  Warner.  Some  years 
before,  Sadler's  Weils  had  been  opened  for  a  similar  purpose 
and  the  experiment  made  in  the  Pentonvillo  suburb  by  Messrs. 
Phelps  and  Greenwood  resulted  in  a  success  which  continues 
to  the  presejit  day.     Mrs.  AVarner,  unrivalled  in  a  certain  line 


80  TACTS,   FAILmES,    A>'D   r^AUDS. 

of  her  profession,  had  been  associated  with  Mr.  Phelps  in  the 
direction  of  Sadler's  Wells,  when  the  change  for  the  better 
took  place ;  and  if  a  similar  reform  was  to  be  effected  in  the 
more  northern  suburb,  the  good  work,  it  seemed,  could  scarcely 
have  been  entrusted  to  better  hands.  She  was,  moreover, 
completely  at  liberty,  having  retired  from  the  theatre  she  had 
for  some  time  adorned,  and  was,  therefore,  in  a  position  to 
direct  all  her  energies  to  a  new  sphere  of  action. 

The  great  respect  deservedly  felt  for  Mrs.  "Warner,  and  the 
hope  that  a  hitherto  obscure  theatre  might,  under  proper 
management,  become  a  home  for  the  legitimate  drama,  ren- 
dered the  opening  of  the  Marylebone  Theatre  in  1847  one  of 
the  great  "facts"  of  the  day.  The  literary  world,  especially 
that  portion  of  it  which,  dissatisfied  with  the  lighter  kinds  of 
theatrical  entertainment,  is  e^er  ready  to  expect  a  "  good 
time,"  when  the  Elizabethan  drama  shall  be  rivalled  by  the 
Victorian,  rallied  in  great  force  on  the  first  night,  and  expec- 
tations were  more  than  satisfied.  The  company,  headed  by 
Mrs.  "Warner,  was  quite  up  to  the  average  level  of  talent ;  the 
appointments  of  the  stage  were  of  that  tasteful  kind  that  had 
distinguished  Sadler's  Wells  since  the  days  of  its  reformation ; 
and  the  audience  part  of  the  house  was  marked  by  every  atten- 
tion to  elegance  and  comfort.  In  a  word,  the  task  which  Mrs. 
Warner  had  taken  upon  herself  was  most  creditably  per- 
formed. 

The  aristocrats  of  Marylebone  might,  without  compromis- 
ing their  character  for  taste  and  gentility,  have  liberally  pa- 
tronized the  theatre  .thus  opened  in  their  neighbourhood ;  for 
the  management  was  respectable  to  the  highest  degree,  and 
the  plays  produced  evinced  a  desire  to  render  popular  the 
intellectual  and  poetical  drama.  The  works  of  the  old  English 
authors  were  ransacked  for  pieces  that  had  not  been  witnessed 
for  generations,  and  some  of  them  were  revived  in  unexcep- 
tionable style.    At  no   house  in  London  was   a  more  lofty 


TACTS,  FAILUBES,    AND  FBAUD8.  81 

Btandarfl  maintained  than  at  the  Marylebone,  but  unfortunately 
a  taint  of  vulgarity,  the  result  of  antecedents,  clung  to  tlio 
edifice ;  the  boxes  remained  unoccupied,  and  at  the  end  of  her 
first  season  Mrs.  "Warner  laid  down  the  sceptre  she  had  so 
honourabh''  wielded,  convinced  that  every  attempt  to  render 
the  Marylebone  a  fashionable,  or  even  "  genteel "  theatre,  must 
end  in  disappointment. 

The  house,  however,  remained  open  under  the  manage- 
ment of  Mr.  Walter  Watts,  whose  name  was  well-known  in 
the  establishment  as  the  real  tenant  of  the  house  during  IMrs. 
Warner's  management,  but  who  had  not  hitherto  been  con- 
spicuous in  the  eyes  of  the  general  public.  The  source  of  the 
wealth  that  enabled  him  to  carry  on  a  speculation  that  to  most 
men  would  have  been  speedily  ruinous,  was  a  profound  mystery, 
and  the  fact  that  he  lived  in  a  state  of  luxury  at  a  house 
in  St.  John's  Wood,  with  an  occasional  residence  at  Brighton, 
increased  the  singularity  of  his  position.  It  was  ascertained 
that  he  was  a  clerk  at  some  large  ofiice  in  the  City ;  but  as  this 
knowledge  rather  embarrassed  than  solved  the  question  which 
his  strange  prosperity  had  raised,  bold  hypotheses  were  started 
and  circulated  on  the  interesting  subject.  Here  intervened, 
for  his  especial  behoof,  the  sort  of  gilded  hruit  repandu  which 
so  long  sustained  his  credit  and  rendered  his  position  compara- 
tively secure.  lie  was  a  fortunate  speculator  on  the  Stock 
Exchange,  and  there  existed,  it  was  said,  a  communica- 
tion between  him  and  the  French  government  (then  under 
King  Louis  Philippe),  by  which  he  received  early  and  exclusive 
information  for  his  guidance.  This  in  turn  served  him,  it  was 
alleged,  to  have  communication  with  our  own  authorities  on 
special  topics,  of  the  knowledge  of  which  he  made  good 
use.  There  were  also  successes  on  the  turf,  which  increased 
the  gain  made  by  speculations  in  stocks  and  shares.  Actors  are 
not  used  to  commercial  affairs,  and  those  at  the  Marylebone 
could  not  be  blamed  if   they  were  willing  to  credit  reports 

o 


82  FACTS,   rAILIIEES,   AXD    FKAFDS. 

that  pursued  the  character  of  a  man  who  was  an  excellent 
paymaster — if  they  had  a  cause  for  respect,  when  the  directors 
of  the  Globe  liad  no  cause  for  suspicion. 

During  the  season  of  1848-9,  Mrs.  Mowatt  and  Mr.  Da- 
venport, two  American  artists,  commenced  an  engagement 
at  the  Marylebone  Theatre,  wl)ere  they  had  been  preceded  by 
several  English  **  stars"  of  the  first  magnitude.  The  gentle- 
man was  affirmed  to  be  the  best  general  actor  that  ever 
visited  us  from  the  other  side  of  the  Atlantic ;  the  lady  was 
rather  an  accomplished  amateur  than  a  regular  actress,  and  in 
her  own  country  had  enjoyed  the  fame  both  of  a  poetess  and  of 
a  beauty.  She  came  to  England  accompanied  by  her  husband, 
and  the  letter  of  introduction  that  she  brought  with  her  at 
once  procured  her  admission  into  the  most  unquestionably 
respectable  circles.  She  and  INIr.  Davenport  made  their  debut 
at  the  Princess's  Theatre,  when  under  the  management  of  Mr. 
Maddox ;  they  then  played  at  the  old  Olympic  Theatre,  when 
it  was  conducted  on  "  legitimate"  principles  by  Mr.  Spicer ;  but 
it  was  not  till  the  engagement  at  the  Marylebone  that  the  lady 
attained  the  full  measure  of  her  ability.  In  a  long  succession 
of  known  plays,  she  acted  characters  commonly  awarded  to 
artists  of  the  first  order ;  new  woi'ks  were  written  for  the 
express  purpose  of  displaying  her  talent;  and  a  four-act 
drama  from  her  own  pen  was  one  of  the  leading  novelties  of 
the  theatre. 

However,  it  was  not  so  much  by  her  exhibition  on  the 
stage,  as  by  the  combination  of  her  professional  with  her 
social  position,  that  Mrs.  Mowatt  gained  her  chief  celebrity^ 
"Walter  "Watts,  as  manager  of  the  Marylebone  Theatre,  did 
all  he  could  to  encourage  the  young  and  beautiful  "  star," 
who  brought  to  his  house  a  class  of  persons  such  as  had  never 
before  assembled  in  the  neighbourhood  of  Portman  Market. 
Her  dressing-room  was  fitted  up  with  such  exquisite  taste, 
that,  situated  as  it  was  below  the  stage,  it  resembled  rather  a 


FACTS,   FAILUBES,   AND  FBAUDS.  83 

feiry  grotto,  than  a  closet  in  a  minor  theatre.  There  the 
queen  of  the  evening,  at  the  conclusion  of  some  successful 
performance,  -would  receive  visits  from  ladies  and  gentlemen 
of  high  rank  in  literature  and  the  arts  ;  there  also  little  sup- 
pers, in  the  most  elegant  and  expensive  style,  were  given  to  a 
select  few. 

Still,  in  spite  of  the  excitement  produced  at  the  Marjle- 
bone,  a  permanent  prosperity  seemed  unattainable,  and  "Walter 
Watts  wished  to  continue  his  theatrical  speculations  in  a 
more  central  part  of  London.  The  Olympic  Theatre,  in  Wych 
•Street,  Strand,  having  been  burned  down,  a  new  house  of  more 
substantial  material  had  been  built  in  its  stead,  and  this  was 
taken  by  Walter  Watts,  with  the  intention  of  opening  it  on 
the  "  boxing-night"  (Dec.  26)  of  1849.  Nevertheless,  the  per- 
formances continued  at  the  Marylebone  till  within  about  a  fort- 
night of  this  period,  and,  a  few  nights  after  they  had  ceased. 
Watts  celebrated  his  retirement  from  the  theatre  he  had 
managed  with  so  much  spirit,  by  giving  a  farewell  ball  and 
supper  on  the  stage,  to  which  all  the  company  and  many 
private  friends  were  invited.  It  must  not  for  a  moment  be 
imagined,  that  there  was  anything  in  these  gaieties  of  the 
Marylebone  Theatre  that  in  the  slightest  degree  violated  the 
rules  of  propriety.  The  liberality  with  which  the  entertain- 
ments were  provided  was,  it  is  confidently  asserted,  fully 
equalled  by  the  decorum  which  prevailed  throughout  them  all ; 
and  they  were  participated  in  by  persons  of  both  sexes  upon 
whom  the  breath  of  suspicion  could  not  rest  for  a  moment. 
Walter  Watts  was,  to  all  appearance,  a  kindly,  free-hearted 
gentleman,  who  having  an  infinite  quantity  of  money  at  his 
command,  applied  it  to  the  laudable  purposes  of  patronizing 
art  and  making  his  friends  happy.  If  the  source  of  his  means 
was  a  mystery,  there  was  no  mystery  about  his  expenditure. 
The  brilliancy  of  the  Marylebone  Theatre  was  the  subject  of 
conversation  aU  over  London  during  the  year  1849 ;  the  only 


Si  TACTS,   rAILTTUES,    AND   PUAUDS. 

persons  who  knew  nothing  about  it  being,  apparently,  those 
chiefly  interested,  namely,  the  directors  of  the  office  in  which 
he  was  a  humble  subordinate. 

At  the  farewell  ball  given  on  the  stage  of  the  Marylebone 
Theatre,  an  incident  took  place,  which  partially  reminded  some 
present  of  the  "  Feast  of  Belshazzar."  In  the  course  of  a 
dance,  after  the  magnificent  supper,  that  had  seemed  the  crown- 
ing effort  of  the  occasion,  the  dress  of  one  of  the  young  girls, 
a  member  of  the  corps  de  ballet,  coming  into  contact  with  the 
foot-lights,  caught  fire  in  an  instant,  and  the  graceful  figure 
that  bad  appeared,  a  few  minutes  before,  all  animation  and 
gaiety,  was  converted  in  an  instant  into  a  revolving  mass  of 
flame,  from  which  piercing  shrieks  were  issuing,  and  which 
was  avoided  by  all  the  rest  of  the  dancers,  fearful  that  their 
light  dresses  would  also  have  ignited.  The  accident  did  not 
prove  fatal,  as  the  young  creature,  after  several  weeks'  illness, 
recovered  under  the  medical  care  generously  provided  for  her 
by  "Walter  "Watts ;  but  the  sudden  change  of  a  scene  of 
mirth  into  a  spectacle  of  terror,  made  a  painful  impression 
on  many  minds,  and  when  the  career  of  the  host  was  brought 
to  a  sudden  and  violent  termination,  early  in  the  spring  of 
1850,  the  thought  of  the  farewell  ball  at  the  Marylebone 
Theatre,  with  all  its  attendant  horrors,  reverted  to  the  memory 
as  a  sort  of  omen  that  had  foreshadowed  a  future  calamity 
infinitely  more  awful. 

In  accordance  with  the  intentions  of  "Walter  "Watts,  the 
new  Olympic  Theatre,  fitted  up  in  the  manner  that  in  all 
essential  particulars  has  continued  to  the  present  day,  was 
opened  with  an  efficient  company  on  the  26th  of  December, 
1849,  and  an  address  in  verse,  written  for  the  occasion,  was 
spoken  by  Mrs.  Mowatt.  The  same  style  of  management  that 
had  distinguished  the  Marylebone  Theatre  was  likewise  carried 
on  at  the  Olympic,  both  on  the  stage  and  behind  the  scenes, 
with  the  exception  that  here  everything  was  still  more  brilliant. 


FACTS,   FAILUnrS,    AND    FEALD8.  85 

Works  of  literary  pretensions  were  produced  with  admirable 
taste ;  the  entertainments  given  to  the  friends  and  the  recog- 
nized hahitues  of  the  establishment,  were  more  costly  than 
ever,  and  the  only  persons  who  had  any  cause  to  regard  with 
disaftection  the  new  establishment  were  the  old  theatrical 
managers,  who  suddenly  found  themselves  in  competition  with 
a  rival  of  boundless  liberality,  and  apparently  inexhaustible 
resources.  Prom  the  very  first  night  of  the  re-opening,  how- 
ever, the  speculation  was  evidently  a  failure,  and  the  box- 
openers  of  the  establishment,  who  astounded  the  patrons  of 
the  house  by  the  splendour  of  their  liveries,  were  but  very 
lightly  employed.  The  histrionic  force  was  great,  novelty  after 
novelty  was  produced ;  but  in  no  one  instance,  not  even  in  that 
of  the  Christmas  pantomime,  was  a  permanent  success  obtained. 
One  essential  qualification  was  wanting  in  the  manager,  and 
that  was  a  knowledge  of  the  business  in  which  he  had  em- 
barked. Even  if  his  money  had  been  honestly  acquired,  the 
constant  excess  of  outlay  over  profit  must  have  eventually  led 
to  bankruptcy. 

itumour,  which  had  about  this  period  been  very  busy  with 
the  fame  of  "Walter  "Watts,  raised  many  singular  conjectures  with 
regard  to  the  manner  in  which  he  acquired  his  means.  These 
vrere  baffled  and  allayed  for  a  time  by  the  assertion  of  his 
friends  and  those  countless  parasites  who  always  attach  them- 
aelves  to  men  who  float  on  the  tide  of  prosperity,  and  who  are 
lavish  in  their  expenditure  and  social  enjoyments.  It  must  be 
confessed  they  worked  well  in  supporting  the  reputed  wealth 
of  their  patron.  The  old  stories  of  Stock  Exchange  specula- 
tion, successes  on  the  turf,  and  other  incidental  adventures, 
■were  revived  in  the  most  exaggerated  forms  to  prove  that  his 
money,  if  not  honestly,  was  so  far  legitimately  acquired,  and 
seemed  to  satisfy  and  appease  the  lurking  curiosity  of  the 
moment.  But  still  the  competition  he  had  raised,  and  the 
profuse  manner  in  which  he  entertained  his  friends — ^for  many 


86  FACTS,   TATLrEES,   AND   rUATJDS. 

of  tlie  latter  enjoyed  his  liospitalitj,  and  then  doubted  either 
its  necessity  or  prudence — gave  rise  to  prejudicial  surmises 
which  subsequently  became  realized,  and  that  in  the  most 
deplorable  form. 

Early  in  1850,  when  the  career  of  the  Olympic  was  yet  pro- 
gressing, although  its  fortunes  were  far  from  brilliant  as  a 
pecuniary  speculation,  a  report  was  spread  that  defalcations 
and  abstractions  had  been  discovered  in  one  of  the  large 
assurance  offices.  For  a  day  or  two  the  statement  was  circu- 
lated without  assuming  any  true  form  or  substantiality,  but 
very  shortly  one  of  those  curt  intimations  that  sometimes 
appear  in  the  City  articles  of  the  daily  jom-nals,  announced 
that  the  Globe  Assurance  Company  was  the  establishment 
interested ;  that  "Walter  Watts  was  the  pronounced  delinquent, 
and  that  the  books  would  be  immediately  put  under  a  course 
of  strict  investigation.  But  the  allegation  thus  formally  made 
was  not  implicitly  believed,  and  his  friends  then  again  en- 
deavoured to  support  his  reputation  by  asserting,  in  the  first 
place,  that  he  would  not  be  found  to  have  committed  the  frauds ; 
and  in  the  next,  reducing  his  position  of  responsibility  by 
averring  that,  if  he  had  interfered  with  the  funds  of  the  office, 
he  could  not  be  legally  proved  guilty,  as  he  was,  in  fact,  a 
partner  holding  shares  in  the  office.* 

The  discovery  of  the  frauds  committed  came  like  a  thunder- 
clap on  the  members  of  the  theatrical  profession.  Here,  then, 
the  mystery  of  "Walter  "Watts's  inexhaustible  wealth  was  solved 
at  last.  The  bubble,  which  had  glittered  so  brightly,  was  burst. 
But  a  few  days  before,  a  play,  produced  at  the  Olympic,  had 
been  dedicated  by  its  author  (a  gentleman  high  in  the  literary 
world)  to  Mr.  "Watts,  as  a  probable  regenerator  of  the  drama ; 
and  now  the  Maecenas  stood  before  the  world  as  a  mere  vulgar 

*  This  report  no  doubt  arose  from  the  position  he  himself  assumed,  as 
•will  be  seen,  by  the  report  of  the  trial,  in  the  evidence  of  Mr.  Tite,  the 
deputy-chairman  of  the  company. 


TACTS,    rAILTTBES,   AND   rBATTSb.  87 

crimiual.  Among  the  members  of  his  company  there  id  reason 
to  believe  that  this  frightful  change  awakened  feelings  of  un- 
feigned sorrow.  His  management  had  been  obviously  and 
notoriously  imprudent,  but  his  transactions  in  connection  with 
his  theatre  had  ever  been  distinguished  by  honour  and  integrity. 
To  the  very  last  he  fulfilled  engagements  which  he  might  easily 
have  evaded,  and  no  manager  in  London  was  less  open  to  the  im- 
putation of  sharp-practice  or  shuffling  than  Mr.  Walter  Watts. 
Before  quitting  this  remarkable  but  chief  episode  in  the 
career  of  this  "  high-art  criminal,"  attention  should  be  called  to 
one  fact,  the  ignorance  of  which  has  furnished  occasion  to  much 
calumny  and  injustice.  Many  persons  have  supposed  that  the 
theatrical  speculations  of  Mr.  Watts  were  the  cause  of  his 
crimes,  and  on  this  account  the  position  of  Mrs.  Mowatt  has 
been  fearfully  misconstrued,  especially  by  her  own  country- 
men. Now,  it  is  perfectly  certain  that  Walter  Watts  was 
deeply  involved  in  crime  long  before  his  managerial  frauds 
began,  and  long,  indeed,  before  the  American  artists,  who 
acquired  so  much  celebrity  at  his  theatres,  had  quitted  their 
native  land.  When  they  came  to  England,  they  found  Watts 
the  established  director  of  a  London  theatre,  at  which  the  most 
respectable  members  of  the  theatrical  profession  had  "  starred ; " 
and  if  his  outlays  were  more  than  ordinarily  profuse,  Ameri- 
cans, whose  personal  style  of  living  is  described  as  elaborate, 
and  even  more  than  Parisian,  had  no  right  to  be  suspicious, 
when  Englishmen,  who  had  much  better  opportunities  for 
forming  a  correct  judgment,  looked  on  without  mistrust.  As 
for  the  costly  presents  made  to  Mrs.  Mowatt,  and  the  splendid 
appointments  of  her  dressing-room,  they  could  scarcely  as- 
tonish a  lady  fresh  from  a  country  where  tho  adulation  of 
talent  is  carried  to  an  extent  that  seems  almost  ridiculous  in 
Europe ;  and  certainly,  if  any  presents  at  all  are  within  tho 
limits  of  propriety,  they  are  those  that  are  made  by  a  manager 
to  his  chief  artist. 


S3  TACTS,   rATLUEES,   AND   TEAUDS, 

"No  sooner  was  the  fact  of  the  Globe  frauds  publicly  an- 
nounced, than  the  Olympic  Theatre  was  closed,  and  the  gay 
entertainments  in  "Wych  Street  abandoned.  For  some  few 
days  Walter  Watts  remained  at  large,  having,  it  may  be  said, 
almost  defied  the  dii'ectors  by  asserting  his  position  as  a  share- 
holder ;  and,  with  characteristic  coolness,  referred  them  to  the 
treasury  of  the  theatre,  or  his  solicitors,  if  they  desired  furtlier 
explanations.  His  conduct  in  the  affair  was  extremely  haughty, 
and  when  first  charged  with  his  crimes  by  Mr.  Tite,  the  then 
deputy-chairman  of  the  company,  boldly  declared  his  inno- 
cence ;  and  having  been  informed  that  his  books  and  papers 
had  been  placed  under  seal,  and  would  be  subjected  to  investi- 
gation, he  still  showed  little  or  no  concern,  his  sangfroid  never 
forsaking  him  throughout  the  whole  proceeding.  It  was  only 
necessary  for  the  books  to  be  cursorily  searched,  before  it  was 
evident  that  large  abstractions  had  been  efiected,  and  that 
principally,  in  fact  wholly,  through  the  clever  dexterity  of 
Walter  Watts.  But  while  this  was  the  case,  it  was,  never- 
theless, equally  apparent  that  the  system  which  prevailed  had 
enabled  him,  with  the  exercise  of  some  ingenuity,  and  a  large 
amount  of  daring,  to  deprive  the  company  of  several  thousands 
per  annum.  Immediately,  therefore,  the  directors  resolved  to 
have  him  placed  under  surveillance,  and  he  was  without  delay 
brought  before  the  authorities  at  the  Mansion  House,  and 
arraigned  on  the  charge  of  having  defrauded  his  employers. 
IN"©  moral  doubt  existed  of  his  guilt,  but  in  a  legal  point  of 
view  there  were  difficulties,  he  having  destroyed,  as  far  as 
possible,  every  trace  of  the  irregular  transactions  in  which  he 
had  been  so  long  engaged.  But  the  talent  brought  to  the 
assistance  of  the  directors  helped  them  through  this  difficulty. 
At  length,  after  several  remands,  Walter  Watts,  though  well 
defended,  and  apparently  confident  of  an  escape  from  the  hands 
of  justice,  was  committed  for  trial  at  the  next  sessions  of  the 
Criminal  Court. 


TACTS,    FXILTTEES,    AND   FBAUDS.  89 

While  the  criminal  proceedings  were  yet  pending,  the 
directors  of  the  Globe  Office  considered  it  necessary,  for  the 
justification  of  their  character  as  the  managerial  body  of  a 
great  public  company,  and  for  the  future  protection  of  the 
interests  of  their  shareholders,  to  institute  a  thorough  investi- 
gation into  these  frauds — the  manner  in  which  they  had  been 
perpetrated — the  amount  of  loss  they  involved — and  the  sys- 
tem of  book-keeping  and  check  under  which  they  had  arisen, 
and  by  means  of  which  they  had  been  facilitated.  They  ac- 
cordingly engaged  the  services  of  one  of  the  most  eminent 
accountants  in  the  City  of  London  for  that  purpose  ;  and  he, 
after  devoting  considerable  time  and  attention  to  the  subject, 
embodied  the  conclusions  to  which  he  had  arrived  in  two  re- 
ports. These  documents  were  never  published,  as,  it  was 
contended,  they  could  not  serve  any  object  beyond  the  gratifi- 
cation of  curiosity,  while  they  might  possibly  have  tended  to 
bring  the  management  of  the  office  into  discredit  by  showing 
an  inexcusable  absence  of  proper  vigilance  and  foresight.  It 
is,  however,  understood  that  the  task  entrusted  to  the  able 
professional  accountant  they  selected,  Mr.  J.  E.  Coleman,  em- 
braced not  only  the  most  searching  inquiry  into  past  occur- 
rences, but  a  full  and  complete  examination  into  the  whole 
system  of  account-keeping  adopted  by  the  office — the  ability 
and,  to  a  certain  extent,  the  conduct  of  its  officers — and  to  the 
suggestion  of  such  changes  and  improvements  as  should  aftbrd 
efficient  security  against  the  repetition  of  similar  delinquencies. 

The  first  report,  which  was  laid  before  the  Board  somewhere 
about  the  close  of  the  month  of  March,  1850,  is  presumed  to 
have  been  merely  of  a  preliminary  character ;  but  it  is  said  to 
have  contained  the  important  facts,  that  the  defalcations  during 
the  year  1849  alone  amounted  to  upwards  of  £18,000 ;  that  in 
the  receipt  department  of  the  office  there  was  no  effective  check 
against  fraud,  although,  owing  to  the  integrity  of  the  officials, 
no  fraud  had  taken  place  ;  and  that  in  the  accountant's  office, 


90  FACTS,  FAILURES,  AND  FEAUD3. 

in  which  "Watts  was  employed,  the  extraordinarily  lax  practice 
prevailed  of  making  the  banker's  pass-book  the  foundation  of 
the  entries  in  the  books  of  the  company,  instead  of  the  docu- 
ments referring  to  the  payments  ordered,  so  that  if  the  person 
having  the  custody  of  the  pass-book  chose  to  falsify  it,  the  false 
entries  were  transferred  to  the  general  books  of  the  office,  and 
thus  made  to  cover  abstractions  effected  through  the  bankers. 
Of  this  laxity  Walter  Watts,  who  was  the  custodier  of  the 
pass-book,  and  part  of  whose  duty  it  was  to  check  it,  took 
advantage,  and  by  its  means  was  enabled  to  carry  on  for  years, 
without  detection,  a  systematized  scheme  of  robbery,  which, 
for  extent  and  daring,  was,  up  to  that  date,  unparalleled  in  the 
history  of  any  public  company,  though  it  has  since,  in  more 
than  one  instance,  been  imitated  with  proportional  success. 

The  second  report  of  Mr.  Coleman  was  presented  to  the  di- 
rectors some  two  months  later,  and,  as  a  matter  of  course,  went 
narrowly  and  in  detail  into  the  modus  operandi  of  the  enormous 
abstractions,  the  key  to  which  had  only  been  arrived  at  after  the 
most  patient  and  laborious  investigation  of  all  the  policies, claims, 
counterfoils  of  cheques,  dividend  warrants,  and  vouchers  of  every 
accessible  kind  relating  to  the  payments  which  had  been  made 
through  the  bankers  during  the  period  of  Watts's  connection 
with  the  institution.  Without  vouching  for  the  exact  accuracy 
of  the  figures,  which,  in  the  absence  of  the  official  document 
itself,  is  impossible,  the  exceedingly  ingenious  manner  in  which 
Watts  contrived  to  make  the  loose  and  unbusiness-like  system 
of  check  which  prevailed  at  the  office  subservient  to  his  nefa- 
rious designs,  may  be  best  explained  by  a  single  instance.  A 
cheque,  say  for  £554  10s.,  represented  as  for  annuity  l^o.  6, 
was  drawn  and  paid  by  the  bankers,  and  entered  by  them  in 
the  pass-book.  When  the  book  came  into  Watts's  hands,  he 
erased  the  55,  thus  making  the  payment  appear  £4  10*. ;  and 
in  order  to  mystify  the  matter  further,  he  altei'ed  the  number 
of  the  annuity  to  64  by  adding  the  figure  4.     But,  in  point  of 


TACTS,   TAILTTRES,   AUTD  FBAUDS.  91 

fact,  no  such  claim  existed  against  the  company  at  the  time, 
as  annuity  No.  6,  and  the  payments  on  annuity  No.  64,  having 
been  prenously  made,  a  fictitious  claim  of  £4  10s,  appeared  in 
the  pass-book  as  paid,  in  order  to  provide  facilities  for  covering 
the  abstraction.  But  the  difference  of  £550  being  still  left 
between  the  payment,  as  it  appeared  by  the  falsified  entry  in 
the  pass-book,  and  the  actual  amount  paid.  Watts  had  to  find 
some  means  of  covering  the  discrepancy,  in  order  to  avoid 
detection.  For  this  purpose  he  selected  a  trifling  fire-loss,  say 
of  £7  10s.,  which  had  been  paid  some  time  before,  but  which 
had  not  yet  been  passed,  and  falsified  that  entry  in  the  pass- 
book also,  by  adding  to  it  the  £550,  making  it  appear  that 
£557  105.  was  the  sum  which  had  been  paid,  and  thus,  by 
making  the  total  addition  in  the  book  correct,  perfecting  the 
cover  for  the  fraud. 

In  the  same  way,  it  is  affirmed,  he  tampered  with  the  divi- 
dend account,  falsifying  the  figures,  as  entered  in  the  bankers' 
pass-book,  to  the  extent  of  £1500  on  one  half-year's  dividends, 
which  sum  he  drew  and  transferred  to  his  own  pocket.  It  is 
averred  that  Mr.  Coleman,  the  accountant,  succeeded  in  tracing 
abstractions  efiected  in  this  way  between  August,  1844,  and 
February,  1850,  when  the  first  discovery  of  "Watts's  delinquen- 
cies was  made,  to  the  almost  incredible  extent  of  nearly 
£70,000 ;  and  that  so  thoroughly  systematic  were  his  arrange- 
ments, that  the  balance  of  cash  at  the  bankers  at  the  date 
showed  a  discrepancy  of  under  £10,000,  which  for  the  most 
part  was  temporarily  covered  by  false  additions  in  the  pass- 
book, untU  an  opportunity  offered  of  altering  individual  entries 
that  might  suit  his  purpose,  previously  to  their  permanent 
transference  to  the  general  books  of  the  company,  when  de- 
tection need  no  longer  be  apprehended.* 

*  Those  who  have  seen  the  bankers*  book,  allege  that  it  presented  a 
mass  of  erasures  and  alterations  which  should,  whenever  it  was  before  the 
board,  hare  at  least  created  suspicion,  if  it  had  not  at  once  led  to  detection. 


92  FACTS,   rAILURES,   AND   lEAUDS. 

"Wliat  were  the  results  of  the  inquiry  in  other  respects  is 
not  known.  Whether  the  very  defective  system  which  enabled 
"Walter  Watts  for  between  five  and  six  years  to  pursue  regu- 
larly such  a  course  of  gigantic  fraud,  without  any  discovery  of 
losses  which  must  have  so  sensibly  affected  the  financial  posi- 
tion of  the  company,  and  which,  even  with  the  rudest  mode  of 
bookkeeping  and  checking  of  account,  it  would  be  thought 
impossible  for  any  lengthened  period  to  conceal, — was  of  recent 
introduction,  or  whether  it  had  existed  from  the  first  establish- 
ment of  the  company,  remains,  as  far  as  the  public,  and  pro- 
bably as  far  as  the  Globe  shareholders,  are  concerned,  in  doubt. 
There  can  be  no  question,  however,  supposing  the  information 
from  which  the  foregoing  account  has  been  compiled  to  be 
correct,  that  the  practical  mind  of  the  accountant  suggested 
the  adoption  of  those  simple  and  obvious  checks,  in  regard  to 
payments  made  through  the  bankers,  which  are  calculated  to 
afford  sufficient  security  against  the  drawing  of  cheques,  or 
the  passing  of  entries  without  the  production  of  the  vouchers 
and  documentary  proof  necessary  to  guarantee  correctness. 
There  has  been  no  actual  charge  of  connivance  against  any 
officer  of  the  company  in  Watts's  crimes  ;  still  it  is  difficult  to 
conceive  how  the  pass-book  could  be  constantly  tampered  with 
by  erasures,  and  by  additions  altered  and  re-altered,  without 
attracting  attention.  Still  more  extraordinary  is  it  that  pay- 
ments should  continue  to  have  been  passed,  by  those  of  the 
directorial  body  Avho  superintended  the  financial  affairs  of  the 
company,  upon  fire  and  life  losses,  without  any  reference  to 
the  policies  or  the  claims  sent  in  and  certified  by  the  proper 
officer ;  or  that  auditors,  appointed  to  make  periodical  examina- 
tions into  the  accounts,  should  have  overlooked  the  very  sus- 
picious appearance  which  both  the  pass-book  and  the  fire  and 
life  loss-book  must  have  presented,  and  thus  permitted  a  course 
of  wholesale  robbery  to  go  on  for  years,  which  threatened  to 
bring  one  of  the  most  flourishing  companies  iu  London  to  the 
verge  of  insolvency. 


FACTS,   FAILURES,   AND   FRAUDS.  93 

The  remainder  of  this  miserable  history  is  soon  told.  Tlie 
criminal  sessions  arrived,  and  the  culprit  was  placed  at  the  bar 
of  the  Old  Bailey,  and  there  the  evidence  was  most  complete, 
but  still  legal  difficulties  intervened  ;  and  although  he  was  con- 
victed of  having  stolen  "  a  piece  of  paper  of  the  value  of  l(f.,"  the 
property  of  the  Globe  Assurance  directors,  sentence  was  de- 
ferred on  points  raised  involving  the  consideration  of  the  proper 
framing  of  the  indictment.  It  was  not  long,  however,  before 
these  questions  were  set  at  rest,  having  been  decided  against 
the  prisoner ;  and  at  the  next  sessions  of  the  court  he  was 
called  up  for  judgment,  and  sentenced  to  ten  years'  transpor- 
tation. From  what  subsequently  transpired,  it  is  quite  certain 
that  "Walter  AVatts  did  not  expect  so  severe  a  judgment  on  his 
crimes.  He  had  been  induced  to  suppose,  whether  under 
proper  advice  or  not,  that  a  twelvemonth's  imprisonment  would 
be  the  limit  to  which  he  could  be  assigned  by  the  law  of  the 
land ;  but  the  fact  was  otherwise,  and  when  the  sentence  was 
pronounced  by  Mr.  Baron  Alderson,it  was  remarked  that  his  pre- 
vious strength  and  assurance  immediately  departed,  though  it 
was  not  replaced  by  apparently  deep  and  settled  gloom.  The 
despondency  of  that  memorable  afternoon,  the  resolve  to  ter- 
miuate  his  existence,  and  the  accomplishment  of  his  object  in 
the  dead  of  the  night  while  confined  in  the  ward  with  his  fel- 
low-prisoners, brings  to  the  close  the  career  of  this  unhappy 
man,  the  blind  victim  of  unhallowed  passions  which  tempted 
him  to  the  commission  of  these  frightful  frauds. 


THE   TRIAL    OF   WALTER   WATTS. 

Cektbal  Ckiminal  Couet,  May  10,  1850. 

OLD  counr. 

(Before  Mr.  Baron  Axdebson  and  Mr.  Justice  Ceessweii-.) 

Walter  Walts,  33,  was  indicted  for  stealing  an  order  for  tbo  payment 
of  £1100,  the  property  of  George  Carr  Glyn,  to  whom  he  was  servant. 


94  TACTS,    TAlLrEES,   AND   rSAUDS. 

The  indictment  contained  a  great  number  of  counts ;  in  some  of  them 
the  instrument  in  question  was  laid  to  be  the  property  of  Mr.  Glyn,  as 
treasurer  of  the  Globe  Insurance  Company,  and  in  others  as  belonging  to 
Edward  Goldsmith  and  William  Tite,  the  chairman  and  deputy-chairman 
of  the  society. 

In  another  set  of  counts  the  prisoner  was  charged  with  stealing  a  piece 
of  paper,  the  property  of  the  same  prosecutors. 

The  Attorney-General,  Mr.  Clarkson,  Sir  J.  Bayley,  and  Mr.  Bovill 
appeared  for  the  prosecution ;  Mr.  Cockbum,  Q.C,  Mr.  Bodkin,  and  Mr. 
Bramwell  defended  the  prisoner. 

The  Attoenet-Geneeal,  in  opening  the  case  to  the  jury,  said,  that 
although  the  indictment  contained  a  great  number  of  counts,  the  charge 
against  the  prisoner  in  reality  resolved  itself  into  this,  that  while  employed 
as  a  clerk  and  servant  to  the  Globe  Insurance  Company,  who  were  the  pro- 
secutors, he  had  embezzled  and  stolen  a  valuable  security  of  the  amount  of 
£1400,  the  property  of  his  employers.  He  was  sorry  to  say  that  the  facts 
lay  in  a  very  narrow  compass,  and  would  appear  to  be  quite  conclusive, 
and  he  believed  that  the  case  would  eventually  resolve  itself  into  a  ques- 
tion of  law.  The  jury  were  aware  that  the  Globe  Insurance  Company  had 
carried  on  for  a  great  many  years  a  most  extensive  business  both  in  fire  and 
life  insurances,  and  the  prisoner  had  been  for  several  years  in  their  service 
as  clerk.  He  was  the  son  of  a  gentleman  who  had  held  a  responsible 
office  in  the  company  almost  from  the  period  of  its  establishment,  and  he 
■was  instructed  now  to  state,  on  behalf  of  that  gentleman — and  it  was  due 
to  him  to  do  so— that  the  directors  entirely  exonerated  him  from  the 
slightest  suspicion  of  being  in  any  way  connected  with  this  unfortunate 
transaction.  The  Attorney-General  then  proceeded  briefly  to  state  the 
circumstances  under  which  the  charge  was  preferred.  He  said  that  the 
du'cctors  were  in  the  habit  of  drawing  cheques  upon  their  bankers,  Messrs. 
Glyn  and  Co.,  Mr.  Glyn  being  also  a  director  of  the  Globe  Insurance 
Company,  to  pay  different  claims  ;  and  it  appeared  that  on  the  26th  of 
February  a  cheque  of  this  description  for  £1400  was  found  to  be  in  the 
possession  of  the  prisoner,  by  his  having  paid  it  in  to  his  own  account  to 
the  London  and  Westminster  Bank.  The  cheque  was  paid  ia  due  course  by 
Messrs.  Glyn,  and  was  then  returned  with  a  number  of  others,  with  the  pass- 
book in  which  the  cheque  in  question  was  entered,  in  the  ordinary  course  of 
business,  to  the  prisoner ;  and  he  should  be  able  to  show  that  the  entry  re- 
lating to  this  cheque  had  been  erased,  and  the  cheque  itself  abstracted,  and 
either  destroyed  or  made  away  with  in  some  other  manner,  as  nothing  had 
been  seen  of  it  since.  It  was  under  these  circumstances  that  the  present 
charge  was  preferred  against  the  prisoner ;  and  he  had  only  to  state,  in  addi- 
tion, that  in  consequence  of  a  communication  that  was  received  by  the  direc- 
tors, an  inquiry  and  investigation  took  place  which  led  to  the  discovery  of 


TACTS,  FJLILUBB8,  JJHD  FBAUDS.  95 

more  irregularities,  and  the  prisoner  was  questioned  upon  the  subject, 
but  after  attending  one  or  two  meetings  resigned  his  situation.  These 
were  the  facts,  and  he  believed  that  the  defence  that  would  be  relied 
upon  was,  that  the  prisoner  had  some  small  share  or  interest  in  the 
company,  and  that  being  in  consequence  in  the  position  of  a  partner  he 
was  not  amenable  to  the  charge  of  larceny ;  but,  if  such  should  be  the 
case  he  had  no  doubt  that  under  the  present  form  of  indictment  he  would 
still  be  liable. 

Mr.  F.  Rockley  deposed  that  he  is  one  of  the  clerks  in  the  Lon- 
don and  Westminster  Bank.  On  the  26th  of  February  the  prisoner 
had  an  account  at  that  bank,  and  on  that  day  a  cheque  for  £1400  was 
paid  to  him,  but  whether  it  was  one  of  the  Globe  Insurance  Company  he 
could  not  say.  It  was  placed  to  the  credit  of  the  prisoner.  There  was  a 
clerk  named  Hobson  in  the  service  of  the  Westminster  Bank,  and  ho 
placed  the  cheque  in  due  course  for  that  clerk  to  pass  the  cheque.  Witness 
had  no  recollection  of  the  person  by  whom  the  cheque  was  brought,  but  he 
received  a  memorandum  with  it,  which  he  produced,  upon  which  was  the 
name  of  the  prisoner  in  his  handwriting,  and  also  the  words  "  Messrs.  Glyn 
and  Co.,"  and  the  figures  "  1400,"  in  the  same  character  of  writing. 

By  Mr.  Cockbusn. — Having  the  two  together,  the  signature  and 
the  other  words  and  figures,  he  was  of  opinion  they  were  the  handwriting 
of  the  prisoner.  Unless  he  had  the  opportunity  of  this  comparison,  he 
should  not  like  to  speak  positively  to  the  handwriting  being  the  same. 

The  memorandum  was  put  in  and  read.  It  was  to  the  efi'ect  that  a 
sum  of  £1400,  by  a  cheque  on  Glyn  and  Co.,  had  been  paid  into  the  London 
and  Westminster  Bank  by  the  prisoner  on  the  26th  of  February. 

Mr.  J.  Hobson,  another  clerk  in  the  London  and  Westminster  Bank, 
produced  a  book  containing  the  entry  of  the  cheque  for  £1400  upon  Messrs. 
Glyn  and  Co.  He  also  proved  that  he  presented  the  cheque  with  a  number 
of  others  to  Messrs.  Glyn  and  Co.,  and  received  altogether  the  amount  of 
£4269  16«.  lOd.,  and  handed  that  sum  to  the  London  and  Westminster 
Bank. 

Mr.  W.  Steel,  clerk  to  Messrs.  Glyn  and  Co.,  deposed,  that  he  paid 
the  cheques  brought  by  the  last  witness.  The  Globe  Insurance  Company 
had  for  several  years  kept  a  drawing  account  with  them,  and  they  had  a 
special  form  of  cheque.  One  of  these  cheques,  for  £1400,  was  among  the 
checks  that  he  paid  to  the  last  witness. 

By  Mr.  Cockbuen. — He  did  not  state  this  fact  from  liis  own  know- 
ledge, but  by  the  entry  in  the  books. 

By  Mr.  BoviLL. — There  was  only  one  cheque  for  £1400,  among  those  to 
which  ho  referred. 

Mr.  J.  Santry,  another  clerk  to  Messrs.  Glyn,  produced  a  book  con- 
taining the  entry  of  a  payment  of  a  cheque  for  £1400.  He  said,  he  believed 


96  TACTS,    FAILUBES,   AND    FEAUDS. 

it  was  a  cheque  because  it  was  an  afternoon  transaction — bills  were  generally 
presented  in  the  morning. 

Mr.  CocKBUEN  took  several  objections  to  the  course  of  examination 
that  was  pursued,  contending  that  the  witnesses  ought  only  to  be  allowed 
to  speak  from  their  own  recollection,  and  not  to  be  permitted  to  draw  an 
inference  from  entries  in  the  book. 

Mr.  H.  B.  Reynolds,  the  ledger-clerk  at  Messrs.  Glyn's  produced  the 
ledger  for  the  present  year,  and  proved  that  it  was  his  duty  to  enter  the 
cheques  that  were  paid  over  the  counter.  He  also  proved  that  there  was  an 
entry  on  the  26th  of  February  of  a  cheque  for  £1400  of  the  Globe  Insurance 
Company  having  been  paid  with  several  others. 

In  answer  to  a  question  put  by  Mr.  Cockbuen,  the  witness  said  he 
had  no  personal  recollection  of  such  a  cheque ;  but  he  had  no  doubt  of  the 
fact  of  such  a  cheque  having  been  paid  on  that  day  from  seeing  the  entry 
and  his  knowledge  of  their  usual  course  of  business. 

Mr.  Reynolds  then  proceeded  to  state  that  he  placed  the  cheque  to  the 
debit  of  the  Globe  Company.  It  was  the  custom  of  that  company  to  send 
their  pass-book  to  be  made  up  every  Tuesday  night,  and  all  the  debits  and 
credits  of  the  company  were  made  up,  and  witness  checked  and  dotted  every 
item,  and  the  paid  cheques  were  then  placed  in  it,  and  it  was  fetched  away 
every  Wednesday,  He  said  he  was  quite  certain  he  should  not  have  passed 
such  an  item  as  a  cheque  for  £1400  if  it  had  not  been  produced,  and  that  the 
pass-book  must  have  corresponded  with  their  ledger.  Upon  looking  at  the 
pass-book,  he  said  that  an  item,  which  according  to  the  list  of  entries  in  the 
ledger  should  have  been  that  of  the  cheque  for  £1400,  had  been  erased. 

In  answer  to  a  question  put  by  one  of  the  jury,  the  witness  said  that 
the  ledger  was  compared  with  the  pass-book  by  himself  and  another  clerk 
who  called  out  the  different  items,  and  if  there  had  been  any  variance  there 
■would  have  been  an  immediate  investigation  respecting  it. 

Henry  Probyn,  messenger  to  the  prosecutors,  deposed  that  it  was  his 
usual  duty  to  take  the  pass-book  to  the  bankers  on  the  Tuesday  and  fetch 
it  again  the  following  day,  and  to  give  it  to  the  prisoner  when  he  brought 
it  back.  He  had  no  doubt  he  did  so  in  February  last,  but  he  had  no  per- 
gonal recollection  of  the  matter. 

Mr.  W.  Tite  deposed,  that  he  was  the  deputy-chainnan  of  the  Globe 
Insurance  Company,  and  that  Mr.  G.  C.  Glyn  was  the  treasurer,  and  Mr. 
Edward  Goldsmith  the  chainnan  of  the  company.  The  prisoner  in  Febru- 
ary last  was  a  clerk  in  the  sei-vice  of  the  company,  and  he  was  appointed 
to  that  office  in  the  usual  manner  by  the  directors.  The  principal  duty  of 
the  prisoner,  who  was  assistant-clerk  in  the  accountant's  office,  was  to 
check  the  payments  at  the  bankers'  and  the  bankers'  pass-books,  and  every 
Wednesday  morning  he  had  to  give  a  statement  to  the  directors  of  the 
balance  in  hand  at  the  bankers',  in  order  that  they  might  see  the  state  of 


TACTS,    FAILURES,    Ayo   FRAUDS.  07 

the  funds  of  the  company,  and  proride  accordingly.  When  the  cheques  tliat 
wore  returned  from  the  bankers'  were  verified,  it  was  the  duty  of  the  pri. 
soner  to  tie  them  up  in  a  bundle  in  regular  order,  so  that  tiiey  might 
alwuys  be  referred  to  as  vouchers  both  for  the  bank  and  the  company.  lu 
the  latter  end  of  18iS  and  the  beginning  of  1819  he  received  information 
that  the  prisoner  had  embarked  in  some  theatrical  speculations  and  witness 
remonstrated  with  him  upon  the  impropriety  of  a  person  in  his  position 
being  connected  with  such  matters.  Witness  had  understood  that  he  was 
connected  with  the  Olympic  Theatre  at  the  time  ho  made  this  communica- 
tion  to  him.  On  the  4th  of  last  March  the  secretary  made  a  statement  to 
him  relating  to  irregularities  in  the  pass-books  and  other  matters,  and  an 
investigation  was  immediately  set  on  foot,  and  the  cheque  for  £1400  was 
sought  for,  but  could  not  be  found  among  any  of  the  vouchers.  Witness 
immediately  sealed  up  the  whole  of  the  prisoner's  papers,  and  while  he  was 
doing  so  he  came  in,  and  witness  told  him  to  go  to  his  own  private  room, 
and  he  then  sent  for  his  father,  who  was  the  cashier  to  the  company.  Wit- 
ness, in  the  presence  of  both,  then  said  that  great  irregularities  had  been 
discovered  in  the  cash  transactions  of  the  office,  and  before  ho  took  any 
step  in  the  matter,  he  thought  it  right  to  call  them  both  before  him,  as  ho 
thought  they  must  both  be  involved  in  them.  The  prisoner  asked  him 
what  he  accused  him  of,  and  witness  replied  that  he  made  no  accusation, 
but  his  own  conscience  would  tell  him  more  than  ho  (witness)  could  pos- 
sibly know  at  that  time,  and  he  added  that  it  was  evident  that  very  large 
sums  had  been  abstracted  from  the  funds  of  the  company.  The  prisoner's 
father  vehemently  protested  his  innocence,  and  declared  that  every  shilling 
that  had  passed  through  his  hands  had  been  punctually  paid  to  the  bankers, 
and  witness  believed  that  was  true.  Witness  then  asked  the  prisoner  if  he 
could  say  the  same  thing,  and  ho  rephed  that  he  declined  to  say  anything. 
Witness  said  he  would  leave  the  father  and  son  together  for  ten  minutes, 
and  when  ho  returned  at  the  expiration  of  that  time,  he  found  they  were 
gone ;  and  shortly  afterwards  he  met  the  prisoner  on  the  stairs,  and  ho  said 
that  he  had  been  disgraced  in  the  ofGce  by  having  his  papers  sealed  up,  and 
he  asked  witness  to  seal  up  all  the  other  books  and  papers  of  the  company. 
He  replied  that  ho  should  use  his  own  discretion  as  to  that,  and  the  pri- 
soner then  said  he  was  a  proprietor  as  well  as  witness,  and  ho  had  done 
nothing  that  he  need  be  ashamed  of,  and  ho  would  not  stop  there.  Witness 
told  him  not  to  bluster,  and  that  he  had  formed  a  very  bad  estimate  of  bis 
character  if  he  thought  it  would  have  any  effect  upon  him,  and  the  prisoner 
then  went  away  and  did  not  return.  Witness  afterwards  received  a  letter 
from  the  prisoner  resigning  his  appointment. 

The  letter  was  put  in  and  read.  It  was  dated  March  6,  1850,  and  was 
to  the  effect  that  after  the  accusation  that  had  been  brought  forward  against 
him  on  the  previous  day,  he  (prisoner)  felt  that  ho  had  no  alternative  but 

n 


98  PACTS,   rAILTJEES,   AIS^D    FRAUDS. 

immediately  to  tender  his  resignation ;  but  at  the  same  time  expressed  his 
thanks  for  the  kindness  he  had  received  from  the  company  for  many  years. 
He  also  stated  that,  if  he  was  wanted,  he  should  be  found  during  the  day 
at  the  Olympic  Theatre,  and  if  he  went  out  he  should  leave  word  when  he 
would  return. 

Cross-examined  by  Mr.  Cockbtjeit. — ^Prisoner  had  been  more  than  ten 
years  in  the  service  of  the  company.  He  held  two  shares,  and  witness 
presumed  that  he  received  the  dividend  upon  them.  Before  any  cheques 
were  drawn  for  fire  or  life  losses,  the  claims  were  examined  and  submitted 
to  the  treasury  committee,  and  every  cheque  was  signed  by  the  chairman  or 
deputy-chairman  and  two  of  the  directors,  and  countersigned  by  the  cashier 
or  secretary.  A  book  was  kept  for  the  purpose  of  making  entries  of  all 
Buch  transactions,  and  entries  were  made  of  every  cheque  in  several  other 
books.  The  book  kept  by  the  committee  would  show  the  particulars  of 
every  transaction,  and  of  every  cheque  that  was  signed  in  the  course  of  the 
business.  He  was  aware  that  the  prisoner  surrendered  to  meet  the  charge, 
but  did  not  know  that  he  made  an  appointment  to  do  so. 

Ke-examined. — The  prisoner  would  not,  in  the  ordinary  course  of  his 
business,  have  access  to  the  book  in  which  the  cheques  were  kept,  but  he 
might  have  done  so.  Several  leaves  appear  to  have  been  torn  from  that 
book. 

Mr.  EUis,  clerk  to  Messrs.  Freshfield,  the  solicitors  for  the  prosecution, 
proved  that  he  served  a  notice  upon  the  prisoner  to  produce  the  cheque  in 
question,  and  a  number  of  other  papers. 

Mr.  J.  Ashby,  ledger  clerk  at  the  London  and  Westminster  Bank, 
proved  that  the  prisoner  drew  upon  the  £1400  check,  and  that  there  was 
only  a  balance  of  £20  lis.  Qd.  at  present  in  his  favour. 

The  Attoen"et-Gexeeal  then  put  in  the  Act  of  Parliament  under 
which  the  company  was  formed,  and  this  closed  the  case  for  the  prose- 
cution. 

Mr.  CoCKBTlES  then  submitted  that  the  prosecution  must  fail,  inas. 
much  as  the  prisoner  was  a  partner  in  the  company,  and  therefore  could 
not  be  charged  with  larceny,  or  stealing  part  of  his  own  property.  The 
learned  counsel  cited  several  cases  where  the  members  of  benefit  societies 
had  been  indicted  for  stealing  a  portion  of  the  funds,  and  in  which  juries, 
upon  the  facts,  had  returned  verdicts  of  "  guilty,"  which  had  afterwards 
been  reversed,  upon  the  ground  that  the  parties  stood  in  the  position  of 
co-partners,  having  a  joint  interest  in  the  funds,  and  therefore  could  not  be 
convicted  of  stealing  their  own  property. 

The  learned  Judges,  without  hearing  the  Attomey-G-eneral  in  reply  to 
the  objection,  overruled  it,  upon  the  ground  that  the  present  case  differed 
entirely  from  those  that  had  been  cited.  They  said  it  appeared  to  them 
that  where  the  body  of  proprietors  of  a  company  invested  a  portion  of  their 


TACTS,   TAILUBES,   AND   FEATIDS.  99 

body  with  the  possession  and  management  of  property  of  this  description 
the  act  af  any  person,  notwithstanding  he  might  be  a  proprietor,  dispossess- 
ing persons  in  that  position  of  the  property  so  entrusted  to  them,  amounted 
to  larceny.  The  case  wovdd  have  been  difficult  if  the  property  had  been 
laid  in  the  company  generally,  but  here  it  was  alleged  to  be  in  the  persons 
whose  names  were  mentioned ;  and  they  were  clearly  of  opinion  that  this 
was  sufficient  to  support  the  charge  of  larceny. 

Mr.  Justice  Ceesswell  then  addressed  the  Attorney-General,  and  said, 
that  this  point  of  law  being  disposed  of,  he  should  wish  to  know  what  facts 
he  relied  upon  to  support  the  charge  in  the  indictment. 

The  Attoenet-Gbnebai  said,  he  considered  the  paying  in  of  the  cheque 
to  the  prisoner's  bankers,  and  the  erasure  of  the  entry  in  the  pass-book, 
were  strong  facts  for  the  consideration  of  the  jury. 

Mr.  Justice  Cbesswell  remarked,  that  there  was  no  evidence  that  such 
a  cheque  as  the  one  in  question  had  ever  been  drawn  by  the  Globe  Company, 
or  had  ever  been  in  existence. 

Tlie  Attoeney-Genebal  submitted,  that  some  such  instrument,  whe- 
ther a  genuine  one  or  not  he  could  not  of  course  pretend  to  say,  was  clearly 
proved  to  have  existed,  and  to  be  in  the  possession  of  the  prisoner,  and  ho 
had  had  notice  to  produce  it. 

Mr.  Justice  Ceessweli  asked,  that  supposing  it  had  existed,  and  was  a 
genuine  instrument,  what  proof  was  there  that  the  prisoner  had  stolen  it  ? 
What  evidence  was  there  to  show  that  he  might  not  have  obtained  it  in  the 
regular  course  of  his  affairs  from  the  person  who  was  really  entitled  to  it  ? 

The  Attobnet-Geiteeai  said,  that  that  was  evidence  for  the  jury  to 
consider.  He  then  proceeded  to  contend  that,  supposing  the  Court  should 
reject  the  counts  describing  the  instrument  as  a  valuable  security,  there  was 
ample  evidence  to  support  those  which  charged  the  prisoner  with  stealing 
a  piece  of  paper,  the  messenger  having  clearly  proved  that  he  delivered  the 
cancqjjed  cheque  to  the  prisoner,  who  had  afterwards  made  away  with  it, 
and  this,  he  submitted,  was  sufficient  to  support  the  charge  of  larceny. 

Mr.  Justice  Cbessvtell,  after  some  further  discussion,  said,  ho  would 
let  the  case  go  to  the  jury  upon  the  count  for  stealing  a  piece  of  paper, 
although  at  the  same  time  ho  must  say  he  believed  his  ruling  would  be 
wrong.  It  would,  however,  be  the  means  of  carrying  the  question  before 
the  new  Court  of  Appeal,  where  it  would  be  disposed  of  without  delay,  if 
the  jury,  upon  his  ruling,  should  say  that  the  prisoner  was  guilty.  The 
counsel  for  the  prisoner  would,  of  course,  however,  have  the  right  to  ad- 
dress the  jury  upon  the  facts. 

Mr.  CocKBUEN  accordingly  briefly  addressed  the  jury,  and  commenced 
by  observing  that  in  the  course  of  his  experience  he  had  never  before  seen 
a  case  for  a  prosecution  introduced  in  such  a  mysterious  and  extraordinary 
manner  as  this  Lad  been ;  and  he  submitted  that  it  woa  quite  clear  the 


100  PACTS,   FAILrEES,   AST)   FEAUDS. 

prosecutors  Lad  some  motive  or  object  in  laying  it  before  the  juiy  in  sucli 
a  manner,  and  in  excluding  all  the  information  which  ought  to  have  been 
given  upon  the  subject.  It  was  the  main  principle  of  the  criminal  law  of 
this  country  that  those  who  sought  to  establish  the  guilt  of  a  party  accused 
were  bound  to  lay  all  the  facts  within  their  knowledge  before  the  jury ;  but 
it  was  idle  to  say  that  this  had  been  done  in  the  present  case.  Why  did 
not  the  prosecutors  give  the  jury  some  information  upon  the  subject  of  this 
supposed  cheque  ?  They  had  all  the  books  and  documents  in  their  posses- 
sion, and  of  course  had  ample  means  to  do  so,  but,  instead  of  producing 
such  evidence,  they  contented  themselves  with  merely  putting  certain  facts 
before  the  jury,  hoping  that  they  might,  by  some  means  or  other,  induce 
the  jury  to  return  a  verdict  of  giiilty  against  the  prisoner.  With  regard  to 
the  other  charge,  of  stealing  a  piece  of  paper,  he  submitted  that  it  was 
trumpery  and  ridiculous,  and  he  therefore  called  upon  the  jury  to  acquit 
tlie  prisoner  altogether  of  the  charge  made  against  him. 

Mr.  Justice  Ceesswell  then  addressed  the  jury,  and,  after  observing 
that  the  Court  was  clearly  of  opinion  that  the  first  count  which  described 
the  instrument  as  a  valuable  security,  could  not  be  supported,  because 
there  was  no  evidence  that  such  a  cheque  as  the  one  alleged  to  have  been 
stolen  was  ever  in  the  possession  of  the  prosecutors,  said  that  the  only 
point  the  jury  would  have  to  decide  was,  whether  the  evidence  satisfied 
them  that  the  prisoner  had  stolen  a  piece  of  paper ;  aud  upon  that  question 
he  should  for  the  present  purpose  direct  them  that,  if  they  thought  the 
evidence  that  the  cancelled  cheque  had  come  into  the  possession  of  the  pri- 
soner from  the  messenger,  and  that  he  had  converted  it  to  his  own  use  by 
destroying  it,  or  in  any  other  manner  depriving  the  prosecutors  of  it,  satis- 
fied them  of  the  fact,  they  would  be  at  liberty  to  find  the  prisoner  guilty 
upon  this  count. 

The  jury  retired  at  half-past  three  o'clock.  They  were  in  deliberation 
more  than  an  hour,  and  then  returned  into  court  and  gave  their  verdict, 
finding  the  prisoner  Guilty  of  stealing  a  piece  of  paper. 

Mr.  Justice  Ceesswell  said,  ho  should  reserve  the  point  as  to  the 
sufllciency  of  the  count — a  question  for  consideration  by  the  Court  of 
Appeal. 

The  Attorney- Geneeal  said  there  were  several  other  indictments 
against  the  prisoner,  but  he  should  not  take  any  further  steps  regarding 
them  until  the  present  indictment  was  formally  disposed  of  by  the  decision 
of  the  Judges  upon  the  point  of  law. 

Centeal  Ceiminal  Cottet,  July  10, 1850. 

{Before  Mr.  Baron  Axdeesox,  3Ir.  Justice  Patxesok,  and  Mr.  Justice 
Taifoued.) 

Walter  Watts  was  placed  at  the  bar.  It  will  be  remembered  that 
this  prisoner,  who  was  formerly  a  clerk  in  the  Globe  Insurance  Com- 


TACTS,  FAILUBBS,  AND  FBAUDS.  101 

pany,  and  also  for  some  time  the  lessee  of  the  Olympic  and  Marjlebono 
Theatres,  was  tried  at  the  May  session  of  this  Court  for  stealing  a 
cheque  for  £1400,  the  property  of  the  above  company.  A  great 
many  technical  objections  were  taken  in  the  course  of  the  case,  and 
the  jury  eventually  found  tlie  prisoner  guilty  of  stealing  a  piece  of  paper, 
but  the  point  of  law  was  reserved  for  the  consideration  of  the  Judges,  whe- 
ther the  circumstances  of  the  case  would  legally  justify  such  a  verdict. 
This  point  has  since  been  decided  against  the  prisoner,  who  was  now 
brought  up  to  receive  sentence  upon  the  conviction. 

The  Attobxet-Genebal,  who  appeared  for  the  prosecution,  said  that 
before  judgment  was  pronounced,  ho  begged  to  remind  their  Lordships  that 
there  were  three  other  indictments  against  the  prisoner,  and  he  should 
wish  the  Court  to  read  the  depositions  in  these  cases,  in  order  that  they 
might  be  aware  of  all  the  circumstances  before  they  passed  sentence.  His 
object  in  making  this  application  was  that  the  public  time  might  be  saved, 
because  in  one  event  he  might  feel  himself  compelled  to  proceed  with  some 
of  the  other  cases. 

Baron  Axdeeson  said  he  had  no  objection  to  postpone  passing  the 
judgment,  but  he  should  have  no  opportunity  of  consulting  Mr.  Justice 
Cresswell,  who  tried  the  case,  as  he  had  set  out  on  his  circuit.  Although 
he  did  not  quite  concur  in  the  decision  that  had  been  come  to  by  the  Court 
of  Appeal,  yet  all  he  had  now  to  do  was  to  pass  the  sentence  that  had  been 
fixed.  He  would,  however,  look  at  the  depositions  in  the  other  cases,  and 
sentence  would  probably  be  passed  upon  the  prisoner  in  the  course  of  the 
session. 


SENTENCE  OF  TEN  TEARS   TRANSPORTATION. 

Centbal  Cbiminal  Cotikt,  Jclt  12, 1850. 

{Before  Mr.  Baron  Aidebson,  Mr.  Justice  Pattebon,  and  Mr.  Justice 
Talfoubd.) 

Walter  Watts  was  this  morning  placed  at  the  bar  to  receive  the  judg- 
ment of  the  Court. 

Baron  Aldebsox,  in  passing  sentence,  said  that  the  prisoner  had  been 
tried  at  the  May  session  of  this  court  before  himself  and  his  brother  Cress- 
well  for  the  offence  of  robbing  to  a  very  great  extent  the  Globe  Assurance 
Company,  to  whom  ho  was  servant,  and  a  point  of  law  had  been  reserved 
for  consideration  by  the  Court  of  Criminal  Appeal.  The  count  upon  which 
the  jury  had  found  him  Onilty  apparently  referred  to  a  very  trifling  offence 
— namely,  stealing  a  piece  of  paper,  that  piece  of  paper,  however,  being  in 
fact  a  cheque.  The  point  that  was  reserved  had  since  been  fully  argued,  and 


102  FACTS,   FAILUEES,   A>'D   FEATJDS. 

the  Court  had  decided  it  against  him,  but,  as  the  reasons  for  that  decision 
were  given  very  fully  at  the  time  by  the  late  Chief-Justice  of  the  Common 
Pleas,  he  did  not  think  it  necessary  to  repeat  them  on  this  occasion,  but 
should  at  once  proceed  to  pass  sentence.  The  Court  had  taken  most  se- 
riously into  consideration  the  extent  to  which  they  ought  to  go  in  the 
punishment.  The  offence  upon  the  face  of  the  record  appeared  to  be  a 
very  trifling  one,  but  it  was  perfectly  clear  that  the  act  of  taking  the  piece 
of  paper  involved  an  offence  of  a  very  serious  character,  and  that  the  object 
of  taking  away  this  cheque  was  to  prevent  a  discovery  that  he  had  misap- 
propriated the  money  which  that  cheque  represented,  and  that,  in  point  of 
fact,  he  had  stolen  a  sum  of  £1400  upon  this  one  occasion,  and  it  was  very 
probable  that  upon  other  occasions  he  had  stolen  a  great  deal  more.  The 
Coui't  would  therefore  pass  sentence  upon  him  for  what  he  had  really  done, 
and  not  for  the  particular  offence  as  it  appeared  upon  the  record.  It  ap- 
peared quite  clear  that  this  cheque  was  either  forged — indeed  this  was  most 
probable — or  else  that  he  had  stolen  a  genuine  cheque,  and  feloniously 
appropriated  the  proceeds  to  his  own  use  ;  and  the  object  of  stealing  the 
piece  of  paper,  or  cheque,  afterwards  was  to  prevent  discovery.  In  either 
of  the  cases  he  had  suggested,  the  prisoner  was  guilty  of  a  very  heavy  and 
serious  offence,  and  he  wished  it  to  be  understood  that,  in  the  severe  sen- 
tence the  Court  was  about  to  pronounce,  they  were  punishing  him  for  the 
real  offence  he  had  committed,  and  not  for  merely  stealing  a  piece  of  paper. 
The  prisoner  was  then  sentenced  to  be  transported  for  10  years. 


THE  SUICIDE  AXD  INQUEST  IN  NEWGATE. 

On  Saturday,  July  13th,  two  inquests  were  held  in  one  of  the  prisoners' 
dining-rooms  in  Newgate  by  Mr.  TV.  J.  Payne,  deputy-coroner,  and  a  jury 
of  twenty-three  citizens.  The  first  was  on  the  body  of  Daniel  Blackstaff 
])onovan,  aged  thirty-three,  an  ex-pugilist ;  the  second  on  the  body  of 
"Walter  Watts,  also  aged  thirty-three,  recently  clerk  in  the  Globe  Insurance 
Office,  and  formerly  lessee  of  the  Marylebone  and  Olympic  Theatres.  On 
Friday  the  12th,  Donovan  was  tried  at  the  Central  Criminal  Court,  and 
sentence  of  death  recorded  against  him ;  and  the  same  day  the  deceased 
Watts  was  brought  up  for  judgment,  and  sentenced  to  ten  years'  transpor- 
tation. 

Mr.  Under-Sherlff  Millard  and  Mr.  David  Wire  were  present  during 
the  two  investigations. 

[In  the  case  of  Donovan  it  has  not  been  considered  necessary  to  give  the 
evidence,  but  the  fact  of  the  double  suicide  is  noticed  as  showing  the  simi- 
larity of  effect  produced  by  the  respective  sentences  on  the  respective 
prisoners."! 


PACTS,   PAILUIIES,  AlTD  FBA.TrSS.  103 

ilr.  Cope,  tho  governor  of  the  prison,  examined. — Deceased  was  brought 
up  on  the  IGth  of  April  last  on  two  charges,  for  stealing  an  order  for  £1400, 
and  a  piece  of  paper,  value  Id.  He  was  tried  at  the  following  May  sessions 
of  the  Criminal  Court,  and  judgment  was  then  respited  on  a  point  of  law. 
Judgment  was  given  on  Friday  morning,  and  the  sentence  was  transporta- 
tion for  ten  years.  I  do  not  know  whether  the  judgment  of  the  Court  of 
Criminal  Appeal,  which  was  adverse  to  him,  was  made  known  to  him  until 
he  was  finally  brought  up  for  judgment  to  receive  sentence.  His  health 
was  bad  when  he  first  came  into  the  prison,  and  he  was  under  the  doctor's 
care  and  in  the  infi^rmary  ever  since.  I  was  in  the  court  when  the  final 
sentence  was  passed  on  him,  and  he  appeared  to  be  in  pretty  good  spirits 
after  he  had  heard  the  sentence.  I  did  not  think  he  appeared  at  all  de- 
pressed. In  my  books  he  is  described  as  a  clerk,  and  his  age  is  recorded  to 
be  thirty-three.  After  the  sentence  had  been  passed,  he  was  taken  back 
into  the  infirmary,  where  I  saw  him  on  Friday  evening.  The  occurrence 
happened  in  the  middle  of  the  night,  and  until  a  quarter  to  four  o'clock 
this  morning  I  knew  nothing  of  it,  when  I  was  sent  for.  There  were  four 
prisoners  in  the  same  room  with  him,  and  Waldon,  the  infirmary  assistant, 
slept  in  a  room  adjoining.  When  I  was  called  they  told  me  he  had  been 
dead  for  some  time. 

WiUiam  Smith,  a  prisoner,  examined. — I  was  in  the  infirmary  last 
sight,  and  I  know  the  person  who  is  dead,  Mr.  Watts,  who  was  also  there. 
I  have  been  in  the  infirmary  since  last  Tuesday,  and  had  conversations  with 
deceased,  who  appeared  in  excellent  spirits.  I  saw  him  soon  after  he  was 
sentenced,  and  he  did  not  appear  at  all  different  from  what  he  had  been 
before.  I  never  heard  him  complain  of  anything  being  the  matter  with 
him.  I  slept  three  beds  off  from  him.  I  and  he  went  to  bed  about  a  quar- 
ter to  nine  last  evening.  He  did  not  eat  much  supper,  but  he  took  some 
medicine  about  five  minutes  before  he  went  to  bed.  Mr.  Waldon  gave  ic 
to  him.  Before  he  went  up  to  the  Central  Criminal  Court  on  Wednesday 
morning  last,  ho  said  that  he  expected  to  be  imprisoned  for  twelve  months. 
On  that  day  lie  was  not  sentenced,  and  he  said  the  Judges  were  not  satis- 
fied with  Mr.  .Justice  Cresswell's  decision,  and  that  they  would  write  to  him 
into  the  country,  where  that  learned  Judge  then  was,  and  that  ho  (Watts) 
was  ordered  to  come  up  again  on  Friday.  On  that  day,  when  he  came  back 
to  the  infirmary,  he  said  he  had  got  transported  for  ten  years,  but  he 
seemed  as  usual.  He  also  said  that  he  had  expected  that  sentence  after 
what  the  Judges  had  told  him  on  Wednesday  morning.  I  went  to  bed  at 
nine,  and  woke  again  at  twelve  o'clock  last  night.  All  was  then  quiet.  I 
woke  again  at  three,  and  lay  awake  until  a  quarter  to  four  this  morning.  I 
then  turned  round  in  my  bed,  and  missed  Mr.  Watts,  and,  seeing  his  slip- 
pers and  boots  under  his  bed,  I  then  thought  something  strange  was  the 
case,  and  being  sure  that  ho  had  not  got  up  between  three  o'clock  and  a 


lOi  TACTS   TAILUEES,   AND   FEAUDS. 

quarter  to  four,  I  suspected  that  something  was  wrong.  I  awoke  the  pri- 
soner next  to  me,  and  communicated  to  him  my  suspicions.  He  imme- 
diately jumped  out  of  bed,  and  went  to  the  water-closet  at  the  other  end  of 
the  infirmary,  and  he  called  for  a  knife,  saying  Mr.  Watts  was  there  hang- 
ing quite  dead  and  cold.  I  went — the  other  prisoner's  name  was  Shipton — 
and  saw  Mr.  Watts  there.  We  rang  the  bell  for  the  officer.  Deceased  was 
hanging  suspended  by  a  bit  of  cord  fastened  by  the  side  of  his  neck  from 
some  bars  across  a  window,  which  was  oyer  and  by  the  side  of  the  water- 
closet.  The  feet  of  deceased  were  just  touching  the  ground,  and  were  tied 
together  with  a  silk  handkerchief.  He  was  hanging  about  a  foot  from  the 
seat  of  the  water-closet.  I  think  I  could  reach  the  bars  of  the  window 
from  the  ground ;  he  was  hanging  quite  perpendicularly,  with  his  back  to 
the  wall,  and  his  eyes  wide  open.  When  we  called  for  assistance,  Mr. 
Waldon  came  with  a  knife,  and  deceased  was  cut  down,  and  Shipton  took 
him  and  laid  him  on  the  floor  of  the  infirmary.  A  doctor  was  sent  for, 
although  Mr.  Watts  was  quite  dead.  He  was  in  his  shirt,  with  a  napkin 
on  his  chest,  and  a  locket  suspended  from  his  neck. 

By  a  Juror, — I  believe  the  rope  was  cut  out  of  the  sacking  of  the  bed- 
stead. It  corresponded  with  a  piece  that  was  wanting.  All  the  kuives  are 
given  back  after  every  meal,  and  deceased  had  one  to  cut  his  dinner  and 
supper  with  on  Friday.  I  never  heard  him  say  anything  about  doing  away 
with  himself — quite  the  other  way.  He  was  always  in  full  spirits,  and  did 
not  appear  to  me  to  be  ill. 

By  3Ir.  David  Wire. — I  am  certain  that  during  the  three-quarters  of 
an  hour  that  I  was  awake,  deceased  did  not  go  to  the  water-closet. 

Mr.  M'Murdo,  chief  surgeon  to  the  prison,  examined. — Deceased  was 
first  brought  under  my  notice  and  care  at  Giltspur  Street  prison,  whither 
he  had  been  remanded  before  he  was  brought  here.  He  was  tlien  in  a  state 
bordering  on  delirium  tremens,  caused  by  drink.  People  are  not  of  sound 
mind  at  such  times,  and  he  asked  for  some  brandy  when  he  came  in,  saying 
that  he  had  been  in  the  habit  of  drinking  large  quantities.  When  I  re- 
monstrated with  him  on  that  habit,  he  told  me  he  had  done  so  to  prevent 
the  recurrence  of  a  spitting  of  blood  which  affected  him.  I  thought  he  was 
too  much  excited  then  to  reason  with  him,  and  I  put  him  in  the  infirmary 
of  the  Compter  at  once,  and  I  found  it  necessary  to  give  him  some  stimulus, 
as  he  was  accustomed  to  a  considerable  quantity  of  it.  He  remained  under 
my  care  in  the  infirmary  of  that  and  this  prison  throughout  the  whole  of 
his  imprisonment,  until  his  death.  I  saw  him  in  Newgate  daily,  and  so 
did  my  assistant  and  my  son,  who  is  also  a  surgeon.  He  had  been  getting 
better  since  he  was  imprisoned,  and  had  become  more  cheerful.  He  had 
taken  medicine,  and  was  able  to  bear  the  diminution  of  the  stimulus  at  first 
administered,  and  was  in  good  spirits  apparently.  He  was  very  cheerful 
throughout,  and  very  well  conducted  towards  all.    He  was  continually 


PACTS,   TAILUEES,    ASD   FEAUDS.  105 

complaining  of  headaches,  but  said  they  were  diminishing,  and  I  still  thought 
it  right  to  keep  him  in  the  infirmary.  Ho  was  a  very  excitable  person,  but 
it  is  very  diiScult  to  say  whether  an  unexpected  sentence  would  derange  his 
brain  or  not.  He  frequently  repeated  that  he  had  had  a  great  deal  of  dilE- 
culty  about  his  theatres  and  in  other  ways. 

Robert  Shipton,  a  prisoner  in  tho  infirmary,  examined. — I  spoke  to  Mr. 
Watts  somewhere  about  nine  o'clock  on  the  Friday  evening.  Our  conver- 
sation was  about  the  prison  rules.  We  went  to  bed  without  wishing  one 
another  good-night ;  which  was  not  usual.  He  appeared  very  cheerful,  as 
was  his  custom.  I  went  to  sleep,  and  was  awoke  in  the  morning,  at  a 
quarter  to  four  o'clock,  by  William  Smith,  who  said  that  Mr.  Watts  was 
not  in  bed  nor  in  the  ward.  I  jumped  up  in  a  fright,  and  made  the  best  of 
my  way  to  the  water-closet,  the  only  place  I  thought  ho  could  go  to.  When 
I  opened  the  door  I  saw  him  hanging  by  a  piece  of  rope  from  the  first  cross- 
bar of  the  window,  which  is  in  part  over  and  part  by  the  side  of  the  seat 
of  the  water-closet.  I  immediately  called  out  for  a  knife,  and  whilst  they 
were  bringing  it,  I  took  hold  of  his  hand,  and  found  it  quite  cold  and  stifi". 
The  oflicer  brought  the  knife,  and  I  held  the  body  up  and  he  cut  the  rope, 
and  I  took  deceased  into  the  infirmary.  He  was  quite  dead,  and  I  carried 
him  in  my  arms  like  a  piece  of  timber.  I  have  been  in  the  infirmary  five 
weeks,  and  the  knives  we  use  at  our  meals  are  always  taken  away  and  put 
into  a  cupboard. 

^Ir.  Sewell,  the  assistant-surgeon,  said,  that  he  was  called  that  morning 
alittle  before  four  o'clock.  He  came  immediately  to  the  prison,  and  fouud 
deceased  quite  dead,  and  he  must  have  been  so  for  two  or  three  hours  pre- 
viously. There  was  a  mark  on  the  neck.  Deceased's  face  was  very  much 
congested,  and  he  hud  been  bleeding  from  the  nose,  all  which  were  symp- 
toms  of  death  from  hanging.  Saw  deceased  daily,  and  concurred  in  tho 
opinion  of  ilr.  M'Murdo.  Thought  that  the  pains  in  the  head,  of  which 
deceased  complained,  were  caused  by  a  diseased  condition  of  the  brain,  and 
that  was  produced  by  hard  drinking. 

After  a  few  remarks  from  the  coroner,  the  jury  immediately  returned 
an  unanimous  Terdict  of  "  Temporary  Insanity." 


lOG  TACTS,   TAILrKES,    AlfD    TEAUDS. 


CHAPTEE    TV. 

THE   DELINQUENCIES   OF  MESSES.   STEAHAN,   PAUL, 
AND   BATES. 

The  Surprise  created  by  the  Failure — The  Blow  to  Confidence  in  the  Pri- 
vate Banking  Interest — The  Antecedents  of  the  House — The  Position 
and  Eelations  of  the  Partners — Social  Standing  of  Mr.  Strahan,  and 
the  Religious  Habits  of  Sir  John  Dean  Paul — Distressing  Disclosures 
respecting  the  Appropriation  of  Securities — The  Bankruptcy  of  the 
Firm,  and  subsequent  Criminal  Proceedings  against  the  whole  of  the 
Partners. 

Amongst  the  causes  ct'ZeSre-Avliicli  tlie  annals  of  commercial 
crime  in  our  own  time  supply,  none  has  created  a  more  wide- 
spread interest  than  the  case  of  Strahan,  Paul,  and  Bates,  the 
ex-haukers.*  Not  so  extensively  ruinous,  perhaps,  in  its  results 

*  The  name  of  this  firm  was  originally  Snow  and  Walton.  It  was  one 
of  the  oldest  banking  houses  in  London,  second  only  to  Child  and  Co.,  who 
date  from  1640.  At  the  period  of  the  Commonwealth,  Snow  and  Co.  car- 
ried on  the  business  of  pawnbrokers,  under  the  sign  of  the  "  Golden  An- 
chor." The  firm  about  the  year  1679  suspended  its  payments,  in  common 
■with  most  of  the  London  bankers,  owing  to  the  circumstance  of  the  seizure 
of  their  money  by  that  most  profligate  and  unprincipled  monarch,  Charles 
IL  On  a  recent  examination  of  the  books  of  Strahan  and  Co.,  one  was 
discovered  of  the  date  of  1672,  which  clearly  shows  that  the  mode  of  keep- 
ing accounts  in  those  days  was  in  decimals.  It  is  curious  to  observe  the 
nature  and  quality  of  the  articles  pledged  by  our  ancestors  with  this  house. 
They  were  of  a  miscellaneous  and  somewhat  comical  cliaracter.  One  of  the 
entries  in  the  book  runs  thus : — "  March  10,  1672. — To  fifteen  pounds  lent 

to  Lady ,  on  the  deposit  of  a  golden  2>of  de  cliambre."    The  blank 

might  be  filled  up  with  an  existing  Scotch  title.  About  twelve  years  ago, 
Mr.  Strahan  changed  his  name  from  Snow  to  Strahan,  in  consequence  of  the 
then  late  Queen's  printers  having  left  him  £180,000,  on  condition  of  his 
taking  that  name,  previous  to  wliich  the  title  of  the  firm  was  Snow,  Paul, 
and  Co. 


TACTS,  FAILUBES,  ASJ)  FKAUDS.  107 

as  that  of  the  Fauntleroys* — ^less  remarkable  for  its  bold,  un- 
blushing, and  unmitigated  turpitude  than  that  of  Eowland 

•  Marsh,  Stracey,  Fauntleroy,  and  Qraham  failed  in  1824  for  £799,028, 
and  in  sixteen  years  paid  a  dividend  of  10s.  lOrf.  The  firm  was  established 
in  1792  by  ^lessrs.  Marsh  and  Sibbald,  neither  of  whom  possessed  banking 
experience  or  adequate  capital,  and  who,  therefore,  very  speedily  put  the 
customers'  money  in  jeopardy  to  the  extent  of  £20,000  bad  debts.  To 
retrieve  and  prevent  future  loss,  two  experienced  bank  clerks,  Mr.  Fauntle- 
roy and  Mr.  Stracey,  were  taken  into  the  concern,  and  the  senior  partners 
entered  on  a  course  of  speculation.  But  a  bolder  hand  being  wanted,  Mr, 
Fauntleroy's  son,  a  clerk  in  the  house,  was  admitted  into  the  firm,  and 
became  managing  partner.  Under  his  auspices  the  bank  turned  brick- 
maker  and  builder,  and  gave  largo  assistance  to  adventurers  in  those  profes- 
sions. Yet  affairs  did  not  mend.  Worthless  accounts  were  obliged  to  be 
kept  up  by  renewals  of  worthless  bills.  At  length,  in  1810,  it  was  found 
that  the  original  loss  of  £20,000  had  increased  to  £170,000.  Something, 
therefore,  it  was  felt,  must  be  done,  and  that  "  something  "  being  left  to 
the  accomplishment  of  Mr.  Henry  Fauntleroy,  he  forthwith  appropriated 
the  trust  moneys  and  securities  of  tlie  bank  customers  to  the  support  of 
the  insolvent  firm.  Supplied  in  this  manner  with  abundant  means,  paying 
all  demands,  and  granting  liberal  accommodation,  the  bank  grew  in  public 
estimation,  and  this  faith  was  supposed  to  receive  additional  confirmation, 
in  181 1,  by  the  accession  of  Captain  Graham  to  the  partnership.  But 
losses  went  on  increasing.  Builders  broke,  bricks  were  undersold,  and  in 
1816  a  further  sum  of  £100,000,  customers'  money,  had  gone.  Bankruptcy 
now  became  imminent,  but  Fauntleroy,  conscious  of  four  years'  fraud,  de- 
termined still  that  secret  crime  should  cover  public  deficiencies.  "The 
house  had  always  lived  on  customers'  money."  "  Why,"  he  argued,  "  should 
he  hesitate  at  a  simple  extension  of  the  system  ?  "  He,  therefore,  sat  down 
and  deliberately  committed  to  writing  the  following  memorandum: — 

"  In  order  to  keep  up  the  credit  of  our  house,  I  have  forged  powers  of 
attorney,  and  have  therefore  sold  out  all  these  sums  (amounting,  as  per 
subjoined  list,  to  £178,754  6s,  4d.)  without  knowledge  of  any  of  my  part- 
ners. I  have  respectively  placed  the  dividends,  as  they  became  due,  to 
accoimt,  but  I  never  posted  them."  "  H.  FAUNTiEaor." 

"  7th  May,  1816." 
And  then,  having  "  eased  his  breast  of  perilous  stufi","  ho  entered  on 
eight  years  of  laborious  fraud,  appropriating  sums  received  for  the  purposes 
of  investment,  or  of  security,  and  applying  the  proceeds  of  his  robberies  to 
the  general  funds  of  tlie  banking-bouse.  But  the  inevitable  time  came 
when  the  subtle  web  was  to  be  rent.    The  watcher  grew  weary  of  his  charge, 


108  FACTS,   FATLUEES,   A>'D   FEAUDS. 

StepLenson* — the  guilt  of  the  Strand  banldug  firm  ^xas,  never- 
theless, characterized  by  circumstances  of  so  unparalleled  a 
nature,  as  to  remove  it  altogether  from  the  category  of  ordinary 
delinquencies.  The  evidence  taken  in  the  criminal  trial  at 
the  Old  Bailey,  though  it  brought  clearly  home  to  the  accused 
the  offence  with  which  they  were  charged,  failed  to  throw  any 
light  upon  the  remote  deviation  from  strict  moral  rectitude, 
which  may  be  regarded  as  the  first  step  in  that  unhappy 
sequence  of  events  that  terminated  so  disastrously  to  many 
innocent,  as  well  as  to  the  guilty,  parties. 

The  known  antecedents  of  the  partners  were  altogether 
unassociated  with  any  reputation  for  extravagance  or  impru- 
dence. Their  personal  habits,  while  exhibiting  those  elegances 
of  life,  and  that  liberality  of  expenditure,  becoming  the  station 


and  vigilance  failing  for  a  moment,  a  forgery  wliicli  lie  bad  committed  ia 
1815,  in  the  name  of  Miss  Frances  Young,  led  to  the  discovery  of  frauds 
on  the  Bank  of  England  to  the  amount  of  £360,000.  Public  justice  was 
not  slow  in  vindicating  the  outraged  confidence  of  society.  Henry  Eaun- 
tleroy  was  speedily  found  guilty  of  the  fraudulent  transference  of  Miss 
Young's  stock,  and  in  accordance  with  the  severe  judgments  of  the  age, 
consigned,  on  the  20th  November,  to  a  disgraceful  death. — British  Losses 
ly  Bank  Failures,  1820-1857. 

*  Remington,  Stephenson,  and  Co.  failed  in  1828  with  liabilities  for 
£508,696,  and  in  twenty-two  years  paid  a  dividend  of  lis.  4>\d.  The  crimes 
of  Koland  Stephenson,  who,  in  addition  to  his  responsibilities  as  banker, 
assumed  those  of  "  M.P."  for  Leominster,  and  Treasurer  of  Bartholomew's 
Hospital,  in  order  that  he  might  with  greater  certainty  practice  on  the 
confidence  of  the  bank  customers.  He  lived  for  many  years  a  life  of 
princely  luxury  at  "  Marshalls  "  in  Essex,  and  is  supposed  to  have  passed 
much  of  his  time  at  the  gaming-table.  But  this  wasteful  existence  was 
supported,  not  by  his  private  fortune,  but  by  that  which  belonged  to  others 
— the  bank  money.  Roland  Stephenson  robbed  his  customers  of  upwards 
of  £200,000 ;  and  when  he  could  no  longer  rob  without  detection,  fled  to 
Savannah  with  a  final  theft  of  £50,000  in  his  pocket.  The  distress  occa- 
sioned by  this  failure  was  most  extensive  and  severe,  many  of  the  victims, 
amongst  whom  the  "  widow  "  and  the  "  stranger  "  were  prominent,  having 
Buflered  the  loss  of  all. — British  Losses  by  Bank  Failures,  1820-1857. 


FACTS,   FA1LXJBE8,   ASD   FHAUDS.  109 

of  society  in  which  they  moved,  and  the  social  rank  of  at  least 
one  of  them,  were  by  no  means  characterized  by  wasteful  or 
wanton  extravagance.     They  were  all  of  them  long  past  the 
age  when  the  passions  and  indiscretions  of  youth  arc  apt  to 
lead  men  who  are  unrestrained  by  a  sense  of  deep  moral  re- 
sponsibility and  innate  honour,  from  the  path  of  strict  duty,  and 
to  plunge  them  in  excesses  which,  as  in  the  case  of  the  unfor- 
tunate Henry  Fauntleroy,  are  certain  to  terminate  in  ruin  and 
disgrace.     They  were  not  like  Eoland  Stephenson,  and  many 
who  have  more  recently  stood  upon  the  criminal  platform, 
imprincipled  adventurers  from  the  first,  whom  a  combination 
of  lucky  accidents,  and  their  own  persevering  eflfrontery,  had 
placed  for  a  time  in  the  control  of  funds  belonging  to  other 
people,  the  temptation  to  appropriate  which  to  their  own  pur- 
poses they  were  unable  to  resist.     The  two  senior  members  of 
the  firm  were  the  representatives  of  old  and  wealthy  families, 
long  connected  with  the  trade  of  London,  and  inheriting  by 
direct  descent  that  confidence  and  credit  with  their  fellow- 
citizens,  and  with  the  moneyed  world  in  general — the  natural 
reward  of  upright  and  honourable  commercial  dealing  pursued 
through  many  generations  for  two  centuries — which  is  even  of 
more  value  than  money  capital.     Sir  John  Paul  was  further- 
more a  man  of  great  piety,  holding  high  place  in  the  religious 
world,  and  looked  up  to  as  "  an  elder  in  Israel."     There  was 
scarcely  a  society  belonging  to  the  Evangelical  section  of  the 
Church  of  England  in  which  the  baronet  partner  of  the  Temple 
Bar  Bank  did  not  hold  the  honorary  office  of  treasurer,  trustee, 
or  committee-man,  and  from  which  his  firm  did  not,  in  conse- 
quence, enjoy  more  substantial  advantage  as  tlie  custodiers  of 
their  funds.     Mr.  Strahan,  in  the  social  circle  in  which  he 
moved,  was  equally  esteemed ;  and  down  even  to  a  week  or  two 
before  the  failure  of  the  house,  and  the  discovery  of  the  frauds, 
to  breathe  a  word  of  suspicion  against  his  honesty  would  have 
been  thought  as  unreasonable  as  to  dispute  the  credit  of  the 


110  TACTS,   rAILTTEES,   AXD   rUAITDS. 

Bank  of  England.  Botli  these  gentlemen  had,  besides  succeed- 
ing to  the  business  of  the  bank,  come  into  possession,  by  in- 
heritance, of  private  property  to  a  considerable  amount.  It  is 
known  that  Sir  John's  father,  the  previous  baronet,  purchased, 
many  j-^ears  ago,  one  estate  in  Yorkshire,  for  which  he  paid 
332,000  guineas.  And  that  this  was  no  mere  fancy  price  may 
be  inferred  from  the  fact,  that  at  the  auction  at  which  the  sale 
was  eifected,  a  competitor  offered  within  £1000  of  the  sum,  for 
which  the  property  was  knocked  down.  It  might  be  suggested 
that  the  late  Sir  John,  in  carrying  out  a  desire  to  become  a 
great  landed  proprietor,  might  have  saddled  himself  with  en- 
cumbrances, and  impaired  the  resources  of  the  bank ;  and  that 
from  this  original  cause  sprang  the  ruin  which  ultimately 
supervened.  But  of  this  there  is  no  proof;  nor  does  it  appear 
in  what  way  this  property,  the  entail  of  which  was  cut  off,  was 
disposed  of,  whether  it  ever  descended  to  the  son  or  not.  Mr. 
Strahan,  when  he  came  into  the  concern  on  the  retirement  of 
his  father,  the  late  Eobert  Snow — the  firm  was  formerly  Snow, 
Paul,  and  Paul — entered  it  as  a  moneyed  man,  having  just  suc- 
ceeded to  a  fortune  of  nearly  £200,000,  left  to  him  by  an 
uncle  of  the  name  of  Strahan,  in  consideration  of  which  he 
assumed  that  surname. 

The  only  one  of  the  three  partners  who  could  not  boast  of 
private  means,  was  Mr.  Bates ;  but  he  had  been  for  many  years 
the  confidential  managing-clerk  of  the  firm ;  was  well  acquainted 
with  the  customers,  and  with  the  business  of  the  house ;  he 
had  given  satisfactory  proof  of  his  probity  and  his  ability  dur- 
ing a  long  period  of  faithful  service,  under  his  late  principals  ; 
and  when  a  vacancy  occurred  by  the  retirement  of  the  younger 
Mr.  Eobert  Snow  in  1841,  the  selection  of  their  old  and  tried 
managing-clerk  to  fill  it,  was  calculated  to  add  more  to  the 
credit  of  the  bank,  than  the  introduction  of  Mr.  Strahan's 
capital.  It  is  almost  impossible  to  imagine  an  establish- 
ment possessing  in  a  more  marked  degree  the  main  elements 


FACTS,   FAILUEES,   AND   FBAUDS.  lllf 

of  success.  All  the  partners  were  men  of  business,  and  gave 
their  attention  personally  and  unremittingly  to  the  conduct  of 
their  affairs.  The  connection,  though  not  over  extensive,  was 
one  that  bankers  generally  consider  the  best  paying.  It  con- 
sisted chiefly  of  members  of  the  aristocracy,  and  wealthy  com- 
moners, who  habitually  keep  large  balances  in  their  banker's 
hands.  And  besides  their  banking  business,  they  were  carry- 
ing on  a  Navy  agency,  under  the  name  of  Halford  and  Co.,  in 
Norfolk  Street,  which  the  bankruptcy  accounts  proved  to  have 
been  profitable  to  the  end,  and  the  surplus  assets  of  which 
contributed  something  towards  a  dividend  to  the  unfortunate 
creditors  of  the  bank. 

According  to  all  outward  seeming,  every  ordinary  incentive 
to  wrong- doing  was  wanting  ;  nor  till  the  last  moment  did  it 
appear  that  there  had  been  either  extravagance,  ignorance,  or 
mismanagement,  in  the  usual  sense  of  the  terms.  There  was 
not  even  the  charge,  so  far  as  Mr.  Strahan  was  concerned,  that 
he  engaged  in  any  speculative  enterprises,  except  such  as  were, 
if  not  exactly  germane  to  the  proper  and  legitimate  operations  of 
banking,  at  least  directly  connected  with  the  business  in  which 
the  bank  had  become  involved.  Sir  John  Paul  and  Mr.  Bates 
were  both  mixed  up  with  certain  joint-stock  companies  in  the 
character  of  directors,  as  well  as  shareholders ;  but  it  was  not 
discovered  before  the  bank  stopped  that  the  partners  had  en- 
cumbered themselves  with  an  estate  like  the  Mostyn  collieries, 
involving  a  debt  and  outlay  equal  to  £139,940,  or  that  their 
connection  with  Messrs.  J.  H.  and  E.  F.  Gandell,  to  enable  the 
fulfilment  of  certain  contracts  for  the  construction  of  railways 
in  France  and  Italy,  and  for  the  drainage  of  Lake  Capestang, 
placed  them  in  the  situation  of  the  creditors  of  that  weak  firm 
for  between  £300,000  and  £400,000.  Such  frightful  engage- 
ments as  these  were  sufficient  to  compromise  any  private  bank 
of  the  character  and  position  of  Messrs.  Strahan,  Paul,  and  Co., 
and  notwithstanding  the  personal  resources  of  the  two  private 


112  TACTS,   FAILUEES,  A>'D   TEArDS. 

partners,  the  mystery  of  their  downfall  was  speedily  dissipated 
when  these  awkward  circumstances  were  disclosed.* 

The  reprehensible  practice  of  borrowing  from  the  bank-till 
for  their  own  personal  wants,  seems  to  have  been  recognized 
and  followed  by  all  the  partners  in  this  bank  from  a  very  early 
period.  The  historical  resume  of  the  proceedings  of  the  firm, 
extending  over  the  last  half  century,  prepared  under  the  di- 
rection of  the  Court  of  Bankruptcy,  shows  that,  as  far  back 
as  the  year  1816,  Messrs.  Eobert  Snow,  "William  Sandby,  and 
John  Dean  Paul,  the  partners  of  that  day,  had  become  bor- 
rowers of  their  customers'  money — the  customers,  of  course, 
knowing  nothing  of  the  matter — to  the  tune  of  £29,000 ;  and 
in  1826,  although  "Wm.  Sandby's  share  of  the  debt  was  then 
paid  off  by  his  executors,  Eobert  Snow  appeared  on  the  books 
as  a  borrower  to  the  extent  of  £36,319,  and  the  late  Sir  John 
Dean  Paul  in  the  amount  of  £17,280.  At  the  death  of  Sir 
J.  D.  Paul  in  1852,  this  total  of  £53,600  was  reduced  to 
£'28,500,  by  the  carrying  year  by  year  a  certain  sum  to  profit 
and  loss ;  and  when  the  banlo-uptcy  took  place,  it  was  further 
reduced  to  £23,500.  At  this  period  the  bank  had  fallen  into 
almost  hopeless  insolvency;  and  Sir  John  Dean  Paul's  in- 
heritance was,  in  fact,  the  chief  partnership  in  a  concern,  the 
accounts  of  which  to  the  close  of  the  preceding  month,  viz., 
December,  1851,  exhibited  a  deficiency  of  £71,980  Is.  2d. 
The  official  examination  proved  that,  as  early  as  1849,  the  dis- 
regard of  the  first  principles  of  banking,  of  which  the  then 
partners  had  been  guilty,  had  been  followed  by  its  almost  un- 
varying consequence — immediate  embarrassment  and  prospec- 
tive bankruptcy.  In  fact,  the  state  of  insolvency  had  then 
arisen ;  and  if  they  had  had  the  courage  then  to  close  their 
doors,  and  divide  their  assets  fairly  amongst  their  creditors, 

*  Vide  curious  facts  in  relation  to  this  connection  detailed  in  the  able 
rsport  of  IsSx.  "W.  Turquaud,  who  was  the  authorized  accountant  to  the 
estate. 


TACTS,   FAILUBES,   AND  FRAUDS.  113 

they  would  have  declared  themselves  unworthy  of  public  con- 
fidence as  bankers,  but  they  would  have  avoided  those  despe- 
rate alternatives  which  ultimately  reduced  them  to  the  level  of 
convicted  felons.  Unhappily,  the  same  moral  weakness  which 
had  prevented  their  resisting  the  temptation  to  contravene  the 
first  principles  of  the  calling  in  which  they  had  engaged,  ope- 
rated as  the  hindrance  to  the  timely  confession  of  their  error. 
Their  own  capital  was  gone,  and  the  deposits  of  their  cus- 
tomers had  been  tampered  with.  Money  must  be  secured  to 
keep  themselves  afloat,  and  enable  them  to  meet  the  daily 
drafts  presented  at  the  counter,  particularly  the  heavy  respon- 
sibilities arising  from  the  association  with  Messrs.  Gandell  and 
Co.  The  downward  course  was  begun,  and  they  were  not  long 
in  discovering  the  truth  of  Virgil's  lines — 

"Facilis  descensus  Averni,"  etc.,  etc. 
It  was  easy  to  borrow  the  securities  left  with  them  for  safe 
custody,  raise  money  upon  them  to  tide  over  the  emergency  of 
the  moment,  and  replace  them  before  they  were  called  for ; 
but  for  the  banker,  whose  only  experience  of  loans  should  be 
in  the  capacity  of  the  lender,  to  be  an  habitual  borrower,  is  in 
effect  to  trade  at  a  loss.  The  interest  they  had  to  pay  for 
these  loans,  and  perhaps  the  hazardous  enterprises  they  entered 
into  in  the  vain  hope  of  retrieving  their  position,  added  to  their 
embarrassments.  As  pledges,  the  discount  houses  would  not 
advance  sufficient  money  upon  the  securities  brought  to  them 
by  Sir  Jolin  Paul  (for  this  part  of  the  business  seems  generally 
to  have  been  entrusted  to  his  hands)  ;  to  relieve  the  present 
necessities  of  the  bank,  they  must  be  sold.  They  were  sold, 
and  a  further  breach  of  trust  was  thus  committed,  bringing 
them  directly  and  unmistakably  within  the  operation  of  the 
Act  of  Parliament,  which  dealt  with  the  crime  of  embezzle- 
ment as  committed  by  bankerS;  merchants,  brokers,  and  others 
who  act  in  the  capacity  of  agents.  How  often  the  process  was 
repeated  no  evidence  is  aft'orded ;  but  the  proceedings  in  bank- 

I 


114  TACTS,   rAILUEES,   AND   FEATJDS. 

ruptcy  sliow  tliat  several  others  of  the  bank's  customers  suffered 
from  the  same  species  of  fraud,  besides  the  reverend  gentleman 
on  whose  prosecution  the  delinquents  -svere  finally  convicted. 

For  some  few  months  before  the  final  break  up,  the  sta- 
bility of  the  firm  began  to  be  doubted,  but  only  in  circles 
whose  business  it  is  to  make  themselves  acquainted  with  the 
financial  position  of  those  who  are  likely  to  be  applicants  for 
temporary  advances  in  the  ordinary  course  of  trade.  Constant 
visits  to  the  discount  houses  occasioned  remark,  and  paper 
bearing  the  name  of  the  firm  ofiiered  for  discount  at  two,  three, 
and  four  per  cent,  above  the  market  rates,  led  to  a  suspicion 
that  the  crash  could  not  long  be  delayed.  StiU  not  a  word 
was  breathed  against  the  honesty  of  the  partners;  it  was 
thought  that  they  had  been  unfortunate,  and  perhaps  impru- 
dent, but  nothing  more.  On  Friday,  the  8th  of  June,  a  run 
upon  the  bank  set  in;  and  although  an  application  to  the 
Committee  of  Bankers  for  aid  was  peremptorily  refused,  the 
doors  were  kept  open,  and  during  that  and  the  following  days 
£23,000  was  paid  away  over  the  counter  to  those  customers 
who  had  been  fortunate  enough  to  receive  a  hint  of  the 
approaching  catastrophe,  and  who  were  thus  enabled  to  secure 
to  themselves  an  undue  preference  at  the  expense  of  the 
general  body  of  the  creditors.  So  low  was  the  available  cash 
reduced  by  these  two  days'  drain,  that  at  the  commencement 
of  the  following  week,  when  an  extent  on  behalf  of  the  Crown 
was  put  in,  £2200  only  remained  to  meet  it,  and  an  under- 
taking for  the  balance  had  to  be  given  by  the  authorities 
acting  under  the  bankruptcy  for  the  balance  of  £800,  in  order 
to  prevent  the  seizure  of  the  books. 

The  first  public  announcement  of  the  failure  was  on  Monday 
the  11th  of  June,  and  in  the  Gazette  of  the  following  evening 
the  name  of  the  firm  appeared  as  bankrupts.  Of  the  pro- 
ceedings in  bankruptcy,  it  is  only  necessary  to  say  that  they 
were  unattended  by  a  single  incident  or  explanation  iu  the 


FACTS,    FAILUEES,   A2TD    rRAFDS.  115 

slightest  degree  exculpatory  of  the  bankrupts.  The  total 
amount  of  debts  proved  against  the  two  firms,  the  bauk  and 
the  uavy  agency,  was  in  round  numbers  three-quarters  of  a 
million,  and  the  dividend  realized  has  been  3«.  2d.  in  the  pound. 

On  Tuesday,  the  19th  of  June,  just  a  week  after  the  petition 
in  bankruptcy  had  issued,  in  consequence  of  an  admission  made 
by  the  partners  that  they  had  disposed  of  the  securities 
deposited  with  them  on  trust,  and  applied  the  proceeds  to  the 
purposes  of  the  bank — an  offence  which,  it  appeared,  they 
offered  to  condone  by  giving  notes  of  hand  for  the  amount — an 
application  was  made  to  the  magistrate  at  Bow  Street  police- 
office  for  a  warrant  to  apprehend  Mr.  Strahan,  Sir  J.  D.  Paul, 
and  Mr.  Bates,  on  a  charge  of  having  unlawfully  negotiated,  or 
otherwise  disposed  of,  certain  deeds  or  securities  of  the  value 
of  £22,000,  which  had  been  entrusted  to  them  for  safe  keeping 
by  the  Eev.  Dr.  Griffiths,  of  Rochester.  The  proceedings 
were  taken  under  the  7th  and  8th  Geo.  IV.,  cap.  29,  sec.  49, 
which  enacts  that  any  person  convicted  of  unlawfully  disposing 
of  securities  entrusted  to  him  or  her  for  safe  keeping,  shall  be 
liable  to  be  transported  beyond  the  seas  for  any  term  not  ex- 
ceeding fourteen  years  nor  less  than  seven  years,  or  to  be 
imprisoned  for  any  term  not  exceeding  three  years ;  and  if  a 
male,  to  be  once,  twice,  or  thrice  publicly  or  privately  whipped 
(if  the  court  should  think  fit),  in  addition  to  such  imprisonment. 

The  warrants  were  placed  in  the  hands  of  the  warrant- 
officers,  who  at  once  proceeded  to  execute  them.  JMr.  Bates 
was  apprehended  the  same  evening  at  41,  Norfolk  Street, 
Strand;  after  which  the  officers  started  for  Nutfield,  near 
Eeigate,  the  residence  of  Sir  John  Dean  Paul.  They  found 
Sir  John  at  home ;  but  it  being  now  too  late  to  return  to  London 
that  night,  they  allowed  their  prboner  to  go  to  bed,  and 
arranged  that  he  should  accompany  them  to  town  the  next 
morning.  Accordingly,  on  the  Wednesday  morning  they  con- 
ducted him  to  tbo  Eeigate  station,  arriving  tliere  barely  in 


IIG  TACTS,    FAllirEES,    A>'D    FEAL'DS. 

time  to  save  tlie  train,  which  was  actually  in  motion  when 
Sir  John  took  his  seat  in  a  second-class  carriage.  The  ofRcers 
were  in  the  act  of  following  him  into  the  same  carriage,  when 
a  railway  porter  pulled  them  back,  exclaiming,  "  The  train  is 
in  motion,  and  you  can't  get  in ;"  and  having  closed  the 
carriage-door  against  the  officers,  the  train  went  off  without 
them.  They  immediately  represented  the  facts  to  the  super- 
intendent, but  he  refused  to  signal  the  train  to  stop,  but  con- 
sented to  send  a  telegraphic  message  to  the  London  terminus. 
This  was  done,  and  the  officers  proceeded  to  town  by  the  next 
train,  which  reached  London  Bridge  only  ten  minutes  after  the 
one  they  had  missed.  On  inquiry,  however,  of  the  station- 
master  there  if  their  prisoner  had  been  detained,  he  replied 
"  that  he  did  not  know  Sir  John  Paul  by  sight,  and  of  course, 
therefore,  had  taken  no  steps  in  the  matter."  The  officers  had 
thus  the  mortification  of  finding  that  their  prisoner  had  effec- 
tually escaped,  and  throughout  the  day  no  trace  of  him  could 
be  found.  At  eight  o'clock  the  following  night,  however,  Sir 
John  surrendered  himself  at  Bow  Street  police-station,  inti- 
mating, at  the  same  time,  that  he  had  no  wish  or  intention  to 
deceive  the  officers,  and  that  his  impression  when  he  entered 
the  train  was,  that  they  were  following  in  an  adjoining 
carriage. 

AVhether  Sir  John's  intention  was  to  avail  himself  of  the 
opportunity  which  was  thus,  as  it  were,  providentially  opened 
to  him  for  escaping  from  custody,  must  remain  matter  of  con- 
jecture. Despite  his  own  assertion  to  the  contrary,  the  facts 
■would  lead  to  the  opinion  that  he  did ;  and  that  it  was  only 
when  upon  calm  reflection,  and  probably  afcer  consultation 
with  friends,  he  became  convinced  of  the  utter  futility  of 
attempting  to  evade  justice,  and  considered  the  extent  to 
•which  that  attempt  would  probably  prejudice  his  case  before 
the  jury,  that  he  determined  upon  giving  himself  up.  Had  he 
not  thought  of  escaping,  he  would  hardly  have  left  the  railway 


FACTS,   FAlLTJnES,   AXD   FEAUDS.  117 

before  the  following  train,  which  was  due  in  ten  minutes,  and 
of  which,  as  a  constant  traveller  upon  the  line,  he  could  not 
have  been  ignorant ;  much  less  would  he  have  lain  concealed  the 
whole  of  that  and  the  following  day.  Mr.  Strahan  was  taken 
into  custody  on  Wednesday  evening,  20th  of  June,  as  he  was 
about  to  enter  the  house  of  his  friend,  Mr-  Scrivener,  20,  Bry- 
anstone  Square.  On  that  same  Wednesday,  Mr.  Bates  under- 
went a  brief  examination  at  Bow  Street,  before  Mr.  Jardiue, 
and  on  Thursday  a  similar  proceeding  took  place  with  regard  to 
Mr.  Strahan ;  but  on  each  occasion  only  sufficient  evidence  was 
adduced  to  justify  a  remand.  On  Friday  the  case  was  more 
fully  gone  into,  and  on  being  placed  at  the  bar,  the  prisoners 
gave  their  names — William  Strahan,  aged  47,  Sir  John  Dean 
Paul,  aged  52,  and  Eobert  Makin  Bates,  aged  64.  The  pro- 
secution was  conducted  by  Mr.  Bodkin.  Mr.  Ballantine  at- 
tended on  behalf  of  Mr.  Strahan  and  Sir  John  Paul,  and  Mr. 
Parry  for  Mr.  Bates.  In  laying  the  case  before  Mr.  Jardine, 
the  presiding  magistrate, 

Mr.  BODKIJI  said — Perhaps,  sir,  a  more  distressing  spectacle  was  never 
exhibited  before  you  than  that  which  is  presented  by  the  appearance  of  tho 
three  prisoners  now  standing  at  the  bar  of  this  court — not  prisoners  such 
as  are  usually  seen  in  that  position,  but  gentlemen,  hitherto  standing  high 
in  the  estimation  of  those  who  knew  them,  enjoying  tho  luxury  which  rank 
and  wealth  afford,  and  the  unlimited  confidence  of  those  whose  fortunes 
have  been  entrusted  to  their  keeping.  That  confidence,  it  has  recently 
transpired,  has  been  so  cruelly  betrayed,  and  the  conduct  of  tho  prisoners 
themselves  has  been  of  such  a  nature,  as  to  reduce  them  to  tho  level 
of  common  felons ;  for,  although  the  offence  of  which  they  stand  accused  is 
not  actually  a  felony  in  tho  eye  of  tho  law,  it  is  nevertheless  so  serious  as  to 
render  them  liable  to  transportation  for  a  period  of  fourteen  years.  Indeed, 
were  it  otherwise — if  occurrences  of  this  character  were  not  visited  with  tho 
greatest  severity  of  pimishmcnt — the  consequences  to  society  would  be 
alarming  to  contemplate.  In  the  present  case  I  have  tho  honour  of  repre- 
senting one  of  the  sufferers  from  the  conduct  which  I  have  described,  and  I 
am  not  here  to  complain  of  any  mere  deficiency  arising  in  an  ordinary 
banking  account,  but  to  show  that  these  persons,  having  been  entrusted 
with  bonds  and  securities  of  the  value  of  £22,000  by  my  client,  did,  about 


118  TACTS,  rAlLTJEES,   AND   PEAITDS. 

five  or  six  weeks  ago,  fraudulently,  if  not  feloniously,  appropriate  these 
securities  to  their  own  use,  without  the  knowledge  or  sanction  of  that  gen- 
tleman. It  certainly  does  happen  that  the  individual  for  whom  I  appear  is 
fortunately  placed  in  such  circumstances  that  this  heavy  loss  will  not  leave 
him  a  ruined  man.  Happily  it  has  not,  as,  in  too  many  other  cases  it  has, 
deprived  him  of  the  means  of  prosecuting  these  persons  for  the  wrong 
inflicted  upon  him,  in  common  with  many  who  hare  been  utterly  ruined  by 
similar  acts  of  fraud.  Dr.  Griffiths  considers  it  his  duty  to  do  that  which 
many  of  his  fello  w-sufierers  are  unable  to  do — namely,  to  bring  these  culprits 
to  the  bar  of  a  court  of  justice,  to  answer  for  the  violation  of  a  trust  wliich 
confidence  in  their  honour  and  integrity  as  gentlemen  had  induced  him  to 
believe  would  be  held  sacred,  whatever  may  have  been  the  pecuniary  circum- 
stances of  their  bank.  He  has  been  advised,  and  his  own  private  opinions 
accord  v.'ith  the  advice,  to  proceed  against  the  prisoners  without  any  reser- 
Tation ;  and  having  satisfied  himself  that  this  is  the  proper  course  to  pur- 
sue, after  mature  deliberation,  he  is  determined  that  notliing  shall  prevail 
on  him  to  swerve  from  that  resolution.  You  are  aware,  sir,  that  the  three 
defendants  at  the  bar  are  charged  in  your  warrant  with  having,  conjointly, 
disposed  of  certain  securities  to  a  large  amount,  by  which  means  my  client 
has  been  defrauded  of  his  property.  The  learned  counsel  said  he  should, 
on  that  occasion,  only  examine  Dr.  Griffiths,  and  then  ask  for  a  remand  for 
the  production  of  further  evidence.  He  should  prove  that  the  securities  ia 
question,  with  others  to  the  amount  of  £100,000,  had  been  taken  either  to 
the  house  of  Overeud,  Gurney,  and  Co.,  or  some  other  house  in  the  City, 
and  the  proceeds  appropriated  by  the  prisoners. 

Tlie  evidence  of  Dr.  Griffiths,  who  is  a  Prebendary  of  Kochester 
Cathedral,  was  to  the  following  effect: — I  have  kept  an  account  at 
the  bank  of  Strahan  and  Co.  for  about  thirty  years,  and  have,  from  time  to 
time,  intnasted  them  with  securities  of  various  kinds.  On  the  9th  of  June^ 
1849,  they  purchased  for  me  30,000  Dutch  florins  (23  per  cents.),  making, 
with  others,  150,000,  which  they  were  directed  to  take  care  of  for  me;  but 
I  never  authorized  the  prisoners,  or  either  of  them,  to  sell,  pled;je,  or  nego- 
tiate them  in  any  way  whatever.  On  the  day  Mr.  Bates  was  taken  into 
custody,  and  while  the  other  warrants  were  still  in  the  hands  of  the  officers, 
Mr.  Strahan  waited  upon  me,  and  requested  an  interview.  Some  friends 
and  relatives  of  Mr.  Strahan' s  had  previously  called  upon  me  with  the  same 
view.  Mr.  Strahan  began  by  expressing  his  surprise  that  I  had  been 
unable  to  obtain  any  information  at  the  bank  respecting  my  securities,  for 
he  and  his  partners  were  there  ready  to  give  me  every  information  in  their 
power.  He  said  that  they  were  day  and  night  engaged  in  making  up  their 
accounts,  and  that  if  I  took  legal  proceedings  against  them,  there  would  be 
no  one  competent  to  wind  up  their  affairs.  He  admitted  that  I  was  quite 
justified  in  the  course  I  had  taken,  but  he  urged  repeatedly  that  I  was 


PACTS,  FAItTJEES,   ATSTD  TEAUBS.  119 

doing  a  great  injury  to  the  creditors  and  to  myself,  for  he  had  great 
expectations  that  both  ho  and  Sir  J,  Paul  would,  by-and-by,  have  money 
sufficient  at  their  command  to  redeem  my  securities ;  and  that  they 
had  prepared  notes  of  hand  for  me,  had  I  called  upon  them.  He  further 
told  mc,  in  answer  to  my  inquiries,  thab  my  securities,  with  others, 
had  been  taken  by  Sir  John  Paul,  and  placed  in  the  hands  either  of 
•'  Overend  "  or  "  Bnmand  " — I  forget  which  name  was  actually  stated.  In 
fact,  as  I  understood  him,  Mr.  Strahan  said  ho  had  himself  taken  the  securi- 
ties out  of  the  parcel  in  which  they  were  contained,  and  handed  them  to 
Sir  John  Paul,  who  carried  them  to  the  brokers  in  the  City.  Ee  also  stated 
that  the  various  securities  which  they  had  disposed  in  this  way  amounted  to 
£100,000  in  value ;  but  that  my  securities  were  by  far  the  largest  in  amount 
belonging  to  any  one  individual.  He  stated  that  much  kindness  had  been 
shown  him  by  several  persons  who  were  placed  in  similar  circumstances  to 
myself,  and  therefore  he  hoped  I  would  not  continue  these  proceedings, 
which,  without  benefiting  myself,  would  be  detrimental  to  the  interests  of 
the  public.  He  added  that  he  knew  the  officers  were  in  search  of  him  and 
his  partner,  and  if  they  were  put  into  prison  it  would  be  impossible  to  bring 
their  affairs  to  a  close.  In  reply  to  this,  I  stated  that  I  was  very  unwilling 
to  say  anything  that  would  aggravate  his  feelings,  and  I  assured  him  that  I 
was  not  actuatsd  by  any  vindictive  motive  towards  himself  or  either  of  his 
unhappy  partners ;  but  that  I  felt  bound,  on  public  grounds,  to  proceed  in 
the  course  I  liad  adopted.  I  asked  him  particularly  whether  the  securities 
had  been  kept  in  my  box.  I  had  a  box  at  the  bank,  a  key  of  which  was  in 
my  possession,  and  another  key  in  theirs.  He  said  they  were  not  kept  in 
my  box ;  that  they  were  deposited  in  a  box  in  their  strong  room,  and  had 
my  name  affixed,  to  show  that  they  belonged  to  me.  I  have  caused 
inquiries  to  be  made,  and  have  been  unable  to  discover  any  trace  of  them 
up  to  the  present  time. 

Mr.  Ballaxtixe  said — ^I  do  not  propose  to  address  any  observations 
to-day,  upon  the  present  evidence.  I  am  not  surprised  at  the  intensity  of  the 
public  feeling  which  has  been  excited  by  these  transactions,  and  it  scarcely 
required  the  severe  remarks  with  which  Mr.  Bodkin  thouglit  fit  to  open 
this  inquiry  to  add  to  the  misery  which  these  gentlemen  feel  in  their  pre* 
sent  lamentable  position — misery  which  is  shared  still  more  deeply,  because 
more  innocently,  by  the  relatives  and  friends  who  were  connected  with 
them.  I  am  not  aware  that  I  can  say  anything  to  palliate  that  feeling  on 
this  occasion,  but  I  think  I  shall  not  bo  exceeding  my  duty  here  to-day  when 
I  state  that,  however  deplorable  may  be  the  affairs  of  this  bank,  and  how- 
ever numerous  the  sufferers,  the  ruinous  consequences  can  fall  with  no 
greater  weight  on  any  one  than  upon  Mr.  Strahan  himself,  who  brought 
£180,000  into  the  concern,  every  farthing  of  which  has  been  lost.  I  am 
justified,  I  believe,  in  saying  that  the  partners  have  each  and  all  evinced  a 


120  FACTS,   FAILUEES,    AND   TEArDS. 

common  desire  to  meet  the  case  fully  and  fairly,  sharing  the  responsibility 
alike,  and  making  -what  atonement  they  can  for  the  misfortunes  they  have 
inflicted  on  others,  by  giving  every  information  in  their  power  which  may 
lead  to  a  full  and  truthful  disclosure  of  their  affairs,  regardless  of  the  con- 
sequences to  themselves,  and  the  public  censure,  which  they  are  only  too 
conscious  of  having  deserved. 

The  prisoners  were  then  remanded,  and  as  no  application  was  made  to 
admit  them  to  bail,  they  were  removed  to  the  House  of  Detention. 

From  June,  until  the  12tli  of  September,  when  the  final 
inquiry  before  the  magistrates  took  place,  and  the  prisoners 
■were  committed  for  trial,  they  were  brought  up  week  by  week 
to  the  police-court,  in  order  that  the  evidence,  establishing 
the  crime  against  them,  might  be  completed.  On  the  1st  of 
August  an  application  to  Mr.  Jardine,  the  magistrate,  to  admit 
them  to  bail,  was  successful,  the  amount  being  fixed  at  £6000 
each  personal  recognizances,  and  two  sureties  of  £3000  each, 
with  twenty -four  hours'  notice.  Mr.  Strahan's  sureties  were 
put  in  on  the  following  day,  when  he  was  liberated,  and  on  the 
8th  Mr.  Bates  was  also  bailed  out  of  prison.  Sir  John  Paul 
found  great  difficulty  in  obtaining  sufficiently  responsible  sure- 
ties ;  and  it  was  not  until  the  24th  of  August  that  the  requisite 
bail  was  put  in  on  his  behalf.  Subsequently,  on  account  of  the 
nature  of  the  evidence  adduced  at  the  last  examination,  the 
amount  of  the  bail  was  extended  in  each  case  to  £10,000  per- 
sonal recognizances,  and  two  sureties  of  £5000  each.  In  the 
course  of  these  repeated  adjourned  examinations,  it  was  clearly 
proved  that  the  bonds  had  been  purchased  by  the  firm  on  Dr. 
Griffith's  order,  and  that  they  had  been  variously  disposed  of 
by  the  prisoners  without  the  consent  or  knowledge  of  the  pro- 
secutor, and  the  proceeds  applied  to  their  own  purposes. 
Amongst  the  mass  of  evidence  adduced  against  the  prisoners, 
all  more  or  less  inculpatory,  perhaps  the  most  direct  was  the 
testimony  of  Mr.  Alexander  Beattie,  a  personal  friend  of  Sir 
John  Paul's.     He  deposed — 

I  reside  at  Tunbridge  Wells,  and  am  a  director  of  the  National 
Assurance   Society.    I  remember,  in  the  latter  end  of  the  year  1853, 


PACTS,  failuhes,  akd  frauds.  121 

Sir  John  Paul  came  to  mc  as  a  personal  friend,  and  requested  a  loan 
of  £20,000  upon  certain  stock.  I  informed  him  that  the  society  with 
which  I  was  connected  did  not  grant  loans  in  the  way  proposed,  and  re- 
ferred him  to  the  Stock  Excliange.  In  March,  1854,  he  came  to  me  again, 
respecting  a  similar  loan  upon  foreign  securities,  a  memorandum  of  which 
ho  gave  me  at  the  time ;  there  being  a  difficulty  about  raising  a  loan  upon 
them,  he  expressed  a  wish  to  sell  the  securities,  and  I  undertook  the  nego- 
tiation for  him.  The  securities  were  handed  to  my  brokers,  Messrs.  Fostci* 
and  Braithwaite,  who  sold  them  for  £12,281  55.  The  amount  was  paid 
into  my  bank  by  two  cheques,  and  I  afterwards  gave  Su*  John  Paul  a 
cheque  on  my  bankers  for  the  same. 

The  securities  here  referred  to  were  by  other  witnesses 
identified  as  a  portion  of  those  which  had  been  purchased 
for  Dr.  Griffiths,  and  left  with  Strahan  and  Company  for  safe 
custody. 

At  the  Central  Criminal  Court,  on  the  IStli  September, 
the  grand  jury  returned  a  true  bill  against  all  the  defendants, 
and  on  the  following  day  they  surrendered.  An  application 
by  the  counsel  for  the  prisoners  was,  however,  made  and 
granted  to  postpone  the  trial  until  the  October  sessions,  on 
the  ground  that  they  had  not  had  suflBcient  time  since  the 
committal  to  prepare  their  defence,  and  their  bail  having  been 
renewed  in  the  same  amount  as  before,  they  were  allowed  to 
go  at  large  until  the  trial. 

The  26th  of  October  having  been  specially  appointed  for 
the  trial,  the  accused,  on  the  morning  of  that  day,  attended  at 
the  Old  Bailey  in  discharge  of  their  bail,  and  having  formally 
surrendered,  were  placed  in  the  felons'  dock.  The  interest 
which  the  case  excited  in  the  public  mind  was  evidenced  by 
the  crowded  state  of  the  court.  Admission  could  only  be 
obtained  by  sp'ecial  tickets  from  the  shcrifTs;  and  although 
these  were  issued  with  due  regard  to  the  capacity  of  the 
building,  the  number  of  persons  who  obtained  them  was  so 
great,  that  it  was  with  some  difficulty  the  required  accommo- 
dation  could  be  provided  for  those  who  were  officially  engaged 
on  the  trial.     Many  of  the  heads  of  the  principal  banking 


122  FACTS,  FAILTJEES,    AlfD   FBAUDS. 

firms  of  the  metropolis  were  there,  men  who  had  been  for  years 
on  terms  of  intimacy  with  the  prisoners ;  more  than  one  peer 
of  the  realm,  and  several  leading  members  of  the  House  of 
Commons  were  present,  and,  as  is  always  the  case  on  these  ex- 
traordinary occasions,  there  was  a  considerable  attendance  of 
fashionably-dressed  ladies. 

The  appearance  of  the  prisoners  themselves  was  subdued, 
and  befitting  their  perilous  position.  Their  eyes  wandered 
about  the  court,  but  without  appearing  to  recognize  any  one 
in  it.  The  expression  of  Sir  John  Paul's  countenance  was 
that  of  blank  despair.  Mr.  Strahan  bore  himself  with  more 
of  firmness,  while  something  like  a  feeling  of  hopeful  con- 
fidence was  observable  in  the  features  of  the  other  prisoner. 
During  the  whole  of  the  two  long  days  over  which  the  trial 
extended,  the  prisoners  remained  almost  motionless.  Strahan 
and  Bates  paid  marked  attention  to  the  evidence,  but  the  de- 
sponding apathy  of  Sir  John  Paul  was  only  roused  when  the 
counsel  for  his  fellow-delinquents  endeavoured,  by  cross-exami- 
nation or  argument,  to  shield  their  respective  clients  by  casting 
the  whole  of  the  blame  upon  him.  Great  indeed  was  the  sen- 
sation when  the  verdict  was  pronounced,  and  a  sentence  of 
fourteen  years'  transportation  was  passed.  The  prisoner  Bates 
betrayed  evident  surprise  at  the  verdict,  and  more  so  at  the 
severity  of  the  sentence.  Mr.  Strahan,  who  throughout  main- 
tained a  quiet  gentlemanly  bearing,  had  full  command  over  his 
feelings  to  the  last,  and  appeared  unmoved.  Sir  John  Paul, 
who  at  first  seemed  scarcely  to  appreciate  the  full  meaning  of 
the  judge's  last  words,  and  the  depth  of  the  debasement  to 
which  they  had  consigned  him,  lingered  for  a  moment  at  the 
front  of  the  dock  after  his  companions  had  moved  away ;  but, 
suddenly  recovering  himself,  his  eye  wandered  amongst  the 
crowd,  until  it  fell  upon  the  countenance  of  the  prosecutor, 
and  having  attracted  his  attention,  he  gazed  upon  him  with  a 
look  which,  if  the  reverend  doctor  had  not  been  upheld  by  the 


PACTS,   FAILX7EE8,   XSTD  TBJlVDB,  123 

self-consciousness  of  imperative  duty,  might  have  raised  regret- 
ful feelings  in  his  mind. 

Severe  as  this  sentence  undoubtedly  was  to  men  in  the 
position  of  these  defendants,  no  one  can  fairly  say  that  it 
•was  more  than  commensurate  with  the  offence.  In  a  com- 
mercial country  such  as  England,  no  crime  can  be  more 
heinous  against  society,  as  constituted,  than  a  breach  of  mer- 
cantile trust-  To  tolerate  it,  or  to  pass  it  over  with  ill-judged 
sympathy,  and  equally  ill-timed  mercy,  would  be  to  sap  the 
foundations  of  mercantile  prosperity.  Unfox'tunately,  the 
tone  of  commercial  morality  has  been  of  late  increasing  in 
laxity.  In  the  wider  fields  for  speculation,  and  the  temptation 
which  the  temporary  possession  of  property  belonging  to  others 
offers  to  indulge  in  ill-considered  enterprises,  and  to  repair 
losses  in  the  hope  of  making  them  good  by  another  venture, 
the  chief  cause  of  this  growing  evil  is  probably  to  be  found. 
Had  the  sentence  passed  upon  these  delinquents  been  limited 
to  a  short  term  of  imprisonment,  they  would  probably,  on 
their  restoration  to  society,  have  met  ^vith  commiserators  and 
supporters,  whUe  the  lightness  of  their  punishment  might  have 
encouraged  imitators.  Now  as  convicts,  condemned,  and  legally 
condemned,  to  pass  perhaps  the  whole  of  their  remaining 
days  as  felons,  and  the  associates  of  felons,  their  fate,  sad  as  it 
is  to  themselves  and  their  friends,  will  stand  forth  as  a  whole- 
some example  to  deter  others  from  following  in  the  same  course. 
With  regard  to  Mr.  Bates,  a  very  general  opinion  has  prevailed 
that  his  guilt  was  less  in  degree  than  that  of  his  two  partners. 
Though  nominally  a  principal  in  the  firm,  he  was  really  nothing 
more  than  a  managing-clerk,  having  a  life-salary  of  £1000  a- 
year ;  and  in  anything  he  did,  therefore,  it  may  be  urged,  that 
he  was  but  obeying  the  directions  of  his  superiors.  No  evi- 
dence in  support  of  this  statement  was  produced  upon  the  trial, 
nor  was  it  shown  that  any  one  of  the  illegal  acts  was  committed 
without  his  cognizance.    As  a  partner,  knowingly  participating 


124  FACTS,   FAILUEES,    AXD   TEAUDS. 

in  tte  advantages  of  the  fraud,  lie  was  lield  to  bo  equally 
liable  witb  tbe  rest.*  Perhaps,  after  all,  retributive  justice 
has  fallen  most  heavily  upon  Sir  John  Paul.  Though  his 
name  was  introduced  into  the  firm  as  early  as  the  year  1823, 
he  took  no  share  in  the  profits  until  1852,  when  his  father, 
the  late  Sir  John,  died.  It  is  clear,  then,  that  when  he 
succeeded  to  the  active  responsibility  of  a  partner,  he 
found  himself  the  inheriter  of  insolvency.  But  although  the 
only  honest  course,  on  making  this  discovery,  was  to  insist 
upon  the  doors  being  at  once  closed,  and  the  bankruptcy  pro- 
claimed, yet  seeing  that  the  whole  traditions  of  his  family  were 
associated  with  the  "house,"  it  was  by  no  means  an  unnatural 
feeling  that  he  should  desire  to  restore  its  fallen  fortunes,  and 
establish  himself,  as  his  forefathers  had  been,  at  the  head  of  a 
respectable  and  prosperous  bank.  The  credit  of  the  firm  was 
at  that  time  comparatively  unimpaired,  though  its  capital  was 
exhausted,  and  the  attempt  to  use  that  credit  for  the  purpose 
of  bringing  back  the  capital,  though  highly  reprehensible  and 
dishonest,  was,  under  the  circumstances,  not  altogether  without 
excuse.  But  the  ulterior  crimes  which  this,  as  far  as  Sir  John 
Dean  Paul's  participation  in  the  afiair  has  been  made  public, 
was  the  first  step  towards,  admit  of  no  palliation,  and  the  pun- 
ishment which  he  shares  with  his  fellow-criminals  was  fully 
merited.  He  was  as  guilty  as  the  other  two  partners ;  but 
now  that  all  the  facts  are  patent  to  the  world,  it  would  be 
unjust  to  endorse  an  opinion  that  prevailed  at  the  time,  that 
he  was  the  most  guilty  of  the  three,  and  that  while  his  sentence 
was  no  more  than  adequate  to  the  offence,  it  was,  in  the  in- 
stances of  Strahan  and  Bates,  unduly  severe. 

*  An  attempt  has  been  recently  made  to  obtain  the  hberation  of  Sir 
John  Dean  Paul  and  Mr.  Strahan,  on  the  ground  that,  after  what  has 
transpired  in  the  case  of  the  Royal  British  Bank  and  other  mon'ed  institu- 
tions, the  severity  of  the  sentence,  contrasted  with  the  operation  of  the  law 
as  defined  by  the  Fraudulent  Trustees'  Act,  is  more  than  ever  apparent. 
The  exertions  of  the  friends  of  Mr.  Bates  have  been  successful,  and  he  was 
released  in  October,  1858. 


PACTS,  FAILUKES,  AJSD  FBAIDS.  125 

THE  TRIAL  OF  MESSRS.  STEAHAN,  PAUL,  AND  BATES. 
Centeal  Cbimixal  Old  Coxtet,  Oct.  26, 1855. 

To-day  having  been  specially  appointed  for  the  trial  of  Sir  John  Paul 
and  his  partners,  Messrs.  Strahan  and  Bates,  for  illegally  disposing  of 
securities  to  a  large  amount,  -nrhich  had  been  intrusted  to  them  as  bankers 
for  safe  custody,  the  Court  was  filled  at  an  early  hour  by  persons  anxious 
to  hear  the  proceedings.  Shortly  before  ten  o'clock,  the  defendants,  Wil- 
liam Strahan,  John  Dean  Paul,  and  Robert  Mekin  Bates,  surrendered,  and 
■were  placed  in  the  dock.  At  ten  o'clock  the  learned  Judges,  Mr.  Baron 
Alderson,  Mr.  Baron  Martyn,  and  Mr.  Justice  Willes,  took  their  seats 
upon  the  bench.  Aldermen  Sir  R.  W.  Garden  and  Eagleton,  Mr.  Sheriff 
Kennedy,  and  Mr.  Under-Sheriff  Stone,  accompanied  their  lordships.  A 
great  number  of  gentlemen  connected  with  the  banking  and  mercantile 
community  were  also  present. 

The  Attorney-General,  Mr.  Bodkin,  and  Mr.  Poland,  appeared  for  the 
prosecution  ;  Sir  F.  Thesiger,  who  was  specially  retained,  and  Mr.  Ballan- 
tine,  appeared  for  the  defendant  Strahan ;  Mr.  Sergeant  Byles  and  Mr. 
Hawkins  were  specially  retained  to  defend  Sir  John  Paul ;  and  Mr.  E. 
James,  Q.  C,  also  specially  retained,  and  Mr.  Parry,  appeared  for  the 
defendant  Bates. 

When  the  defendants  were  called  upon  to  plead, 

Sir  F.  Thesigee  apphed  to  the  Court  on  behalf  of  his  cUent,  that  he 
and  the  other  defendants  might  be  allowed  to  plead  double,  and  that,  in 
addition  to  the  plea  of  "  Not  guilty,"  they  should  be  allowed  to  plead  a 
special  plea,  in  order  that  they  might  take  advantage  of  one  of  the  sections 
of  the  Act  of  Parliament  under  which  the  indictment  was  framed.  Sir  F. 
Thesiger  called  the  attention  of  the  Court  to  the  section  of  the  Act  of 
Parliament  of  the  7th  and  8th  of  George  IV.,  under  which  the  incUctment 
was  preferred,  and  to  the  subsequent  section,  which  directed  that  no  person 
should  be  criminally  liable  under  the  Act  who  had,  under  any  compulsory 
process,  made  a  full  statement  of  all  the  matters  connected  with  the  trans- 
action, and  upon  them  he  groimded  his  apphcation. 

Mr.  Baron  Aldeksoit,  after  consiUting  with  his  learned  colleagues,  said 
the  Court  were  of  opinion  that  the  course  suggested  by  the  learned  counsel 
was  one  that  was  without  precedent,  and  the  defendants  must  either  plead 
"  Not  guilty,"  or  else  rely  entirely  upon  the  question  of  law. 

The  case  was  then  about  to  proceed,  when 

The  Attoknet-Geneeal,  addressing  their  Lordships,  said  he  was  in* 
formed  that  Mr.  Beattie,  who  was  a  very  important  witness,  was  not  in 
attendance,  and  he  said  the  administration  of  justice  would  be  in  peril  if 
he  proceeded  with  the  cause  in  the  absence  of  that  witness. 


126  FACTS,   FAILTEES,   A^'D   FIlArDS. 

Mr.  Baron  Aibebson  inquired  whether  the  witness  had  been  subpoenaed, 
or  had  received  notice  to  attend  ? 

The  ATTOENET-GEyEEAL  said,  he  had  been  bound  over  by  the  maoia, 
irate,  and  subpoenaed  also.  On  the  previous  day  he  had  sent  a  communi- 
cation to  llr.  Humphreys,  the  attorney  for  the  prosecution,  stating  that  he 
was  ill,  and  under  medical  advice,  and  had  gone  to  his  house  at  Tunbridge 
Wells.  He  promised,  however,  to  return  to  town  this  morning  by  a  train 
which  would  an-ive  at  half-past  ten  o'clock. 

The  Coiirt  said  that,  under  these  circumstances,  they  had  better  wait  a 
short  time. 

At  eleven  o'clock,  as  the  witness  had  not  arrived,  the  Attorney- General 
applied  for  the  witness  to  be  called  upon  his  recognizances  and  subpoena,  and 
this  was  done,  when  the  Court  ordered  the  recognizances  to  be  estreated. 

The  Attoexey-Geneeal  then  apphed  for  the  postponement  of  the  trial, 
and  a  discussion  was  proceeding  as  to  the  future  day  upon  which  the  trial 
should  be  fixed,  when,  in  the  midst  of  it,  it  was  annotmced  that  the  missing 
witness  had  arrived. 

IVIr.  Sleight,  the  deputy-clerk  of  arraigns,  then  read  the  indictment, 
which  alleged  that  the  defendants  had  carried  on  the  business  of  bankers, 
and  that,  in  that  capacity,  they  had  been  intrusted  with  certain  Danish 
bonds,  of  the  value  of  £5000,  for  the  purpose  of  safe  custody,  and  with- 
out any  authority  to  pledge,  sell,  or  negotiate  the  bonds  so  intrusted  to 
them,  they  had,  contrary  to  good  faith,  sold  and  converted  them  to  their 
own  use. 

In  other  counts,  the  defendants  were  charged  with  having  sold  the  bonds 
in  question,  and  with  having  negotiated  them ;  and  they  were  also  charged 
with  conspiring  together  with  the  same  object. 

The  defendants  having  pleaded  "  Not  giiilty," 

The  Attoenet-Geneeal  then  addressed  the  learned  Judges  and  the 
jury.  He  said,  "  I  have,  on  the  present  occasion,  a  painful  duty  to  dis- 
charge, in  pressing  an  accusation  of  a  very  serious  character  against  the 
defendants  on  this  indictment — gentlemen  known  to  most  of  us.  and  who 
have  hitherto  maintained  a  high  position  in  society,  and  a  character  of 
imquestioned  integrity  and  honour,  which  prevented  them  from  being  sup- 
posed capable  of  the  offence  with  which  they  are  now  charged.  The  pre- 
sent charge  is  one  not  only  involving  penal  consequences  of  great  magnitude, 
but  also  afiecting  the  honour  and  character  of  those  gentlemen  at  the  bar. 
You  are  aware  that  the  defendants  carried  on,  for  some  time,  the  business 
of  bankers  in  this  metropohs.  The  firm  was  one  of  ancient  date ;  its  trans- 
actions were  large,  and  it  enjoyed  the  confidence  of  a  highly  numerous  body 
of  customers.  Among  others,  the  present  prosecutor.  Dr.  Griffith,  Pre- 
bendary of  Eoehester,  opened  an  account  with  the  then  firm  of  Snow,  Paul, 
and  Co.  in  1830.    In  1838,  Snow  retired,  and  the  present  defendanta» 


TACTS,    FAILUEES,   AITD  TBAUDS.  127 

Strahan  and  Bates,  joined  the  firm.    Subsequently,  Sir  J.  D.  Paul,  the 
father  of  the  defendant  (Sir  J.  D.  Paul),  died,  and  firom  that  period  the 
business  has  been  conducted  by  the  three  defendants.     Dr.  Griffith  con- 
tinued the  account  he  had  opened  with  the  firm  of  Snow,  Paul,  and  Co.  in 
1830,  until  the  transactions  now  the  subject  of  inquiry  occurred.    He  was 
a  gentleman  of  great  fortune  and  character,  and  employed  the  defendants, 
as  bankers,  to  invest  money  for  him  from  time  to  time  in  public  and  foreign 
securities.    The  present  inquiry  relates  to  some  of  those  securities,  fraudu- 
lently disposed  of  by  the  defendants,  in  contravention  of  the  statute  which 
makes  it  penal  to  dispose  of  securities  placed  in  their  hands  for  safe  custody. 
Among  these  securities  were  certain  bonds  issued  by  the  Danish  Gx)vem- 
ment,  bearing  interest  at  the  rate  of  5  per  cent. ;  and  I  will  confine  my 
present  observations  entirely  to  those  securities,  as  they  form  the  subject  of 
the  present  inquiry.    It  seems  that  on  three  several  occasions  Dr.  Griffith 
employed  the  defendants  to  invest  money  for  him  in  these  Danish  Five  per 
Cent.  Bonds.     In  1849,  the  Danish  Government  raised  a  loan,  and  issued 
bonds  as  security  to  the  persons  advancing  money.     In  January,  1850,  Dr. 
Griffith  instructed  the  defendants  to  invest  for  him  in  these  Danish  Five 
per  Cent.  Bonds  the  sum  of  £2000.    Whether  he  gave  a  written  order  on 
that  occasion  is  imcertain,  though  probably  he  did.     He  had,  however,  no 
distinct  recollection  of  that  circumstance,  and  no  order  had  been  found ; 
but  nothing  turns  on  that  point,  for  it  is  quite  clcai"  that  he  gave  authority 
to  make  the  purchase.    Accordingly,  a  stockbroker  in  the  City  did  purchase 
on  behalf  of  Dr.  Griffith,  that  amount.    The  bonds  were  bought  on  the 
2nd  of  February,  1850,  and  were  afterwards  delivered  at  the  bank  of  the 
defendants.    They  were  five  bonds  of  £400  each,  and  were  nxmibered  370, 
460,  459,  457,  and  458.    Dr.  Griffith  was  forthwith  debited  in  the  books  of 
the  bank  for  a  sum  of  £2002  10s.,  which  was  the  amount  paid,  including 
the  commission,  for  the  bonds  so  bought.    The  next  transaction  was  in  the 
month  of  April  in  the  same  year,  when  Dr.  Griffith  authorized  the  defend- 
ants to  invest  another  sum  of  £1000  in  the  same  securities.     On  that  occa- 
sion the  defendants  gave  the  order  to  Messrs.  Sims  and  Hill,  stockbrokere, 
and  accordingly,  the  latter  made  the  purchase,  and  sent  it  to  the  defendants* 
banking-house  in  one  bond.    The  number  of  this  bond  was  87,  and  the 
defendants  debited  the  prosecutor  in  the  books  of  the  bank  to  the  amount 
of  £958  15*.     Their  third  transaction  was  in  1851,  and,  on  that  occasion, 
it  is  quite  clear  that  a  written  order  was  given  by  Dr.  Griffith  to  the  defend- 
ants.   That  has  been  foimd,  and  it  is  an  order  desiring  the  defendants  to 
invest  £2000  in  the  same  securities  as  before  mentioned.    The  defendants 
thereupon  again  instructed  Messrs.  Sims  and  Hill  to  purchaae  the  amount, 
and  the  latter  did  so  on  the  10th  of  April,  and  forwarded  the  bonds  on  the 
16th  to  the  banking-house.    The  bonds  consisted  of  two  of  £400  each, 
numbered  426  and  573 ;  two  of  £300  each,  numbered  793  and  794 }  and  aix 


128  r.vcTS,  failuhes,  axd  feauds. 

of  £100,  numbered  657, 659, 660, 661, 662,  and  663.  For  tliis  purchase,  the 
prosecutor  was  debited  in  the  bank  books  of  the  defendants  £2037  10s, 
These  several  bonds  were  purchased  by  the  defendants  through  the  brokers, 
on  these  three  several  occasions,  by  the  express  authority  of  Dr.  Griffith. 
The  defendants  regularly  received  the  dividends  on  these  bonds  as  they 
became  due ;  and  credited  in  their  books  Dr.  Griffith  with  them.  They 
i-eceived  the  dividends  from  time  to  time,  and  continued  to  do  so  until  the 
1st  of  March,  1854.  It  appears  that,  at  that  time,  the  firm  of  Strahan  and 
Co.  had  got  into  certain  difficulties,  and  had  recourse  to  the  desperate  and 
guilty  expedient  of  resorting  to  the  securities  they  held  in  then-  hands, 
belonging  to  their  customers,  for  the  purpose  of  raising  money  to  meet  the 
necessities  of  the  hour.  It  appears  that,  in  the  course  of  March,  1854,  Sir 
J.  Paul  applied  to  a  gentleman  of  the  name  of  Beattie,  secretary  to  a  com- 
pany called  the  National  Insiu'ance  Company,  to  advance  a  sum  of  money 
on  behalf  of  the  company,  in  respect  of  and  on  the  faith  of  these  bonds. 
Mr.  Beattie,  however,  answered  that  the  company  did  not  advance  money 
on  such  securities,  upon  which  Sir  J.  Paid  asked  him  if  he  would  dispose  of 
some  of  these  securities,  in  order  to  raise  the  money.  Mr.  Beattie  consented 
to  this  transaction,  and  took  some  of  the  securities  from  Sir  J.  Paul,  and 
placed  them  in  the  hands  of  Messrs.  Foster  and  Braithwaite,  brokers,  in  the 
City,  for  the  purposes  of  sale.  Among  these  securities  were  the  very  bonds, 
the  numbers  of  which  I  have  enumerated,  and  which  constituted  secui-ity 
for  £5000.  These  were  placed  by  Mr.  Beattie  in  the  hands  of  Messrs. 
Foster  and  Braithwaite,  on  the  following  day,  the  16th  of  March.  Messrs. 
Foster  and  Braithwaite  gave  their  cheque  for  the  amoimt  of  the  sale  to  Mr. 
Beattie,  including  in  it  the  sum  of  £4,793  13*.  6d.  for  the  Danish  bonds. 
The  cheque  being  crossed,  Mr.  Beattie  was  unable  to  get  it  immediately 
cashed  to  hand  over  the  proceeds  to  Sir  J.  Paul,  but  he  paid  the  cheque 
into  liis  bankers,  as  well  as  another  cheque  he  had  received  at  the  same  time 
on  account  of  proceeds  from  other  securities  not  concerned  with  this  inves- 
tigation. He  then  drew  a  cheque  on  his  bankers  in  favour  of  Sii*  J.  Paul, 
and  gave  it  to  Sir  J.  Paul.  There  is  no  doubt  that  Sir  J.  Paid  received  the 
money  on  account  of  that  cheque,  and  made  it  available  for  the  purposes  of 
the  fii'm.  Therefore,  so  far  as  Sir  J.  Paul  is  concerned,  there  can  be  no 
question  of  his  complicity  in  the  guilty  transaction  of  misapplying  the 
secm-ities  which  had  been  deposited  with  him  for  safe  keeping.  It  will  be 
made  perfectly  clear  by  the  evidence  that  Sir  J.  Paul  and  his  partner  had 
no  authority,  direct  or  indirect,  from  Dr.  Griffith,  to  sell  or  otherwise  dis- 
pose of  these  securities.  They  had  been  deposited  in  their  hands,  as  being 
the  bankers  of  Dr.  Griffith,  for  safe  custody.  Nevertheless,  Sir  J.  Paul  did 
dispose  of  them,  and  carried  the  proceeds,  not  to  Dr.  Griffith's  account, 
but  to  his  own  use.  Therefore,  so  far  as  Sir  J.  Paul  is  concerned,  the  case 
is  quite  clear  agaiast  him.    With  regard  to  the  other  two  defendants,  what 


yACTS,   FAILTTRT-.S,    AXD   FBATTDS.  129 

was  the  state  of  their  kuowledgo  of  the  transaction  ?  That  must  be  shown 
by  other  evidence.  This  transaction  took  place  in  Marcli,  1854,  and  in  the 
month  of  Juno  in  tlm  year  the  embarrassments  of  the  firm  became  so  great 
that  it  was  impossible  for  it  to  go  on.  It  accordingly  stopped,  and  became 
bankrupt.  On  hearing  this,  Dr.  GrilGth,  who  had  at  the  time  £22,000 
worth  of  securities  in  their  hands,  became  considerably  alarmed,  and  im- 
mediately put  himself  in  communication  with  the  official  assignee,  and 
asked  what  had  become  of  his  securities.  The  official  assignee  proceeded 
to  the  banking-house,  and  inquired  about  them.  He  was  told  by  Mr. 
Stralian,  in  the  presence  of  Mr.  Bates,  that  the  securities  were  either  sold 
or  pledged.  He  then  asked  whether,  in  any  book,  the  secm-ities  of  the 
customers  were  recorded  ;  and  Mr.  Strahan  and  Mr.  Bates  looked  at  one 
another,  and  he  got  no  answer.  Shortly  afterwards,  Mr.  Strahan  proceeded 
to  see  Dr.  Griffith,  who,  in  the  meantime,  had  laid  a  criminal  information 
against  the  pai'tners.  Mr.  Strahan  acknowledged  fully  that  the  securities 
had  been  disposed  of  with  his  knowledge  and  co-operation,  but  xu-ged  most 
anxiously  on  Dr.  Griffith  to  forego  this  prosecution,  and  not  to  adopt  any- 
thing like  a  criminal  proceeding.  Dr.  Griffith  observed  that  he  had  a 
public  duty  to  perform,  and  that,  however  unwilling  he  might  feel  to  act 
hostilely  towards  gentlemen  with  whom  he  had  been  acquainted,  he  had  no 
alternative  but  to  enforce  the  application  of  the  law  against  them.  The 
jury  will  hear  the  details  of  the  conversation  which  passed  with  Dr.  Griffith, 
which  will  leave  no  doubt  on  their  minds  that  Mr.  Strahan  thoroughly 
combined  with  Sir  J.  Paul  in  this  transaction.  In  fact,  the  object  was  to 
raise  money  to  meet  the  necessities  of  the  bank  ;  and,  therefore,  it  will  not 
be  straining  the  evidence  at  all  to  say  that  what  was  done,  was  done  with 
the  concurrence  of  Mr.  Strahan ;  and  it  wiU  bo  for  the  jury  to  say  whether 
or  not  the  transaction  is  brought  fully  homo  to  Mr.  Bates.  The  defendants 
are  indicted  under  the  7th  and  8th  of  George  IV.,  chap.  29,  section  49, 
which  provides : — "  And  for  the  punishment  of  embezzlements  committed 
by  agents  intrusted  with  property,  be  it  enacted,  that  if  any  money,  or 
secui'ity  for  the  payment  of  money,  shall  be  entrusted  to  any  banker,  mer- 
chant, broker,  attorney,  or  other  agent,  with  any  direction  in  writing  to 
apply  such  money  or  any  part  thereof,  or  the  proceeds  or  any  part  of  the 
proceeds  of  such  security,  for  any  purpose  specified  in  such  direction,  and 
he  sluill,  in  violation  of  good  faith,  and  contrary  to  the  purpose  so  specified, 
in  any  wise  convert  to  his  own  use  or  benefit  such  money,  security,  or  pro- 
ceeds, or  any  part  thereof  respectively,  every  such  offender  shall  be  guilty 
of  a  misdemeanour,  and,  being  convicted  thereof,  shall  be  hable,  at  the 
discretion  of  the  Court,  to  bo  transported  beyond  the  seas  for  any  term  r  ot 
cxcecduig  fourteen  years,  nor  less  than  seven  years,  or  to  suffer  such  other 
punishment,  by  fine  or  iinprLsonment,  or  by  both,  as  the  Court  shall  award  ; 
and  if  any  chattel,  or  valuable  security,  or  any  power  of  attonicy  for  tho 


130  FACTS,    FAILUEES,    AND    FEAITDS. 

sale  or  ti-ansfer  of  any  share  or  interest  in  any  public  stock  or  fund,  wlietlier 
of  this  kingdom,  or  of  Great  Britain,  or  of  Ireland,  or  of  any  foreig;n  state, 
or  in  any  fund  of  any  body  corporate,  company,  or  society,  shall  be  intrusted 
to  any  banker,  mei'cliant,  broker,  attorney,  or  other  agent  for  safe  custody, 
or  for  any  special  purpose,  ■withoat  any  authority  to  sell,  negotiate,  transfer, 
or  pledge,  and  he  shall,  in  violation  of  good  faith,  and  contrary  to  the  object 
or  pm-pose  for  -which  such  chattel,  security,  or  power  of  attorney  shall  have 
been  entrusted  to  him,  sell,  negotiate,  transfer,  or  pledge,  or  in  any  manner 
conrerfc  to  his  own  use  or  benefit  such  chattel  or  security,  or  the  proceeds 
of  the  same,  or  any  part  thereof,  or  the  share  or  interest  in  the  stock  or 
fund  to  vrhich  such  power  of  attorney  shall  relate,  or  any  part  thereof,  every 
such  offender  shall  be  guilty  of  a  misdemeanour,  and,  being  convicted  thereof, 
shall  be  liable,  at  the  discretion  of  the  Court,  to  any  of  the  pimishments 
which  the  Court  may  award,  as  hereinbefore  last  mentioned."  I  shall  show 
that  these  secmities  were  purchased  by  the  direction  of  Dr.  Giiffith,  with 
his  money ;  that  they  were  left  for  safe  custody  in  the  hands  of  his  bankers, 
and  that  they  were  disposed  of,  with  the  knowledge  undoubtedly  of  two  of 
the  defendants,  without  the  authority  of  Dr.  Griffith,  and  that  the  proceeds 
were  apphed  in  such  a  way  as  brought  the  transaction  within  the  terms  of 
the  statute  he  had  referred  to.  These  facts  I  shall  prove  distinctly,  and  I 
am  at  a  loss  to  know  in  what  way  they  can  be  met  on  the  part  of  the  defen- 
dants. It  has  been  suggested  that  the  defendants  by  disclosing,  in  an  ex- 
amination before  the  Court  of  Bankruptcy,  aU  these  circumstances,  may 
avail  themselves  of  the  terms  of  another  section  of  the  statute,  which  enacts 
— "  That  nothing  in  this  Act  contained,  nor  any  proceeding,  conviction,  or 
judgment  to  be  had  or  taken  thereupon  against  any  banker,  merchant, 
broker,  factor,  attorney,  or  other  agent  as  aforesaid,  shall  prevent,  lessen, 
or  impeach  any  remedy  at  law  or  in  equity  which  any  party  aggrieved  by 
any  such  offence  might  or  would  have  had  if  this  Act  had  not  been  passed ; 
but,  nevertheless,  the  conviction  of  any  such  offender  shall  not  be  received 
in  evidence  in  any  action  at  law  or  suit  in  equity  against  liim ;  and  no 
banker,  broker,  mei-chant,  factor,  attorney,  or  other  agent  as  aforesaid,  shall 
be  liable  to  be  convicted  by  any  evidence  whatever  as  an  offender  against 
this  Act  in  respect  of  any  act  done  by  him,  if  he  shall  at  any  tune,  pre- 
viously to  his  being  indicted  for  such  offence,  have  disclosed  such  act,  on 
oath,  in  consequence  of  any  compulsory  process  of  any  court  of  law  or 
equity  in  any  action,  suit,  or  proceeding  which  shall  have  been  bond  fide 
instituted  by  any  party  aggrieved,  or  if  he  shall  have  disclosed  the  same  in 
any  examination  or  deposition  before  any  commissioners  of  bankruptcy." 
It  is  true  that  there  were  proceedings  in  bankruptcy,  and  that  some  disclo- 
sures were  made  by  one  of  the  defendants,  or  perhaps  by  the  whole  of  them ; 
but  I  beheve  that  there  will  be  very  little  difficulty  in  showing  that  what- 
ever took  place  in  the  Court  of  Bankruptcy  was  done  by  concert  andconniv- 


TACTS,  rATLirEBS,   AOT)  PBAXJDS.  181 

It  was  not  a  comptiboTy  proceeding,  but  was  resorted  to  purposely 
with  the  view  that  the  defendants  might  avail  themsclTcs  of  a  particular 
section  in  the  Act  of  ParUament  referred  to.  The  securities  in  question 
were  sold  in  March,  185t,  and  after  that,  if  I  am  not  misinformed,  the 
defendants  bought  other  securities,  with  a  view  to  replace  those  they  had 
disposed  of,  and  at  a  subsequent  period,  shortly  before  stopping,  they  dis- 
posed again  of  the  new  securities  so  purchased,  not  to  the  persons  they  sold 
the  first  to,  but  to  other  persons.  Now,  the  disposal  of  these  latter  securi- 
ties, to  which  the  disclosure  in  the  Court  of  Bankruptcy  referred,  is  not  the 
occasion  of  the  present  charge  against  the  defendants.  I  know  nothing  that 
they  may  have  subsequently  done  that  is  at  all  binding  on  Dr.  Griffith. 
That  gentleman  authorized  and  intrusted  them  to  purchase  and  keep  specific 
securities  with  specific  nvunbers,  and  it  is  for  getting  rid  of  those  securities, 
without  his  authority,  and  converting  the  proceeds  to  their  own  use,  that 
they  are  now  charged.  With  respect  to  other  securities  which  they  may 
have  purchased  subsequently,  I  know  nothing ;  and  I  beUevc,  therefore, 
that  this  defence,  if  gone  into,  will  fail.  Having  now  stated  the  principal 
features  of  the  case,  I  feel  it  is  not  incumbent  on  me  upon  the  present  occa- 
sion to  say  one  single  word  which  would  tend  to  aggravate  the  positiop  of 
the  defendants,  or  which  would  operate  to  their  prejudice.  I  shall  simply 
proceed  to  prove  the  fjacts  I  liave  stated,  and  I  do  not  beheve  that,  either 
on  the  merits  or  law  of  the  case,  there  can  be  any  answer  to  the  charge. 

The  evidence  entered  into  was,  in  every  detail,  a  repetition  of  that 
which  has  already  been  given  in  the  history  of  the  failure.  The  case  for 
the  prosecution  having  been  concluded. 

Sir  F.  Thesigbb  wished  to  call  their  lordships'  attention  to  the  nature 
of  the  evidence  against  his  chent,  Mr.  Strahan.  The  indictment  charged 
him  with  a  misdemeanour  in  respect  to  certain  bonds,  which  were  num- 
bered, and  which  were  sold  by  Foster  and  Braithwaite  in  March,  1854. 
But  there  was  no  proof  that  Mr.  Strahan  had  anything  to  do  with  that 
transaction,  nor  any  evidence  in  support  of  the  charge,  except  the  con- 
versation which  had  been  stated  by  Dr.  Griffith,  and  which  conversation 
referred,  not  to  the  transaction  in  question,  but  to  a  transaction  which  had 
occurred  only  six  weeks  before  that  conversation.  Dr.  Griffith  was  told 
that  his  securities  had  been  taken  by  Sir  J.  D.  Paul  to  Messrs.  Overend 
or  Bumand  about  six  weeks  previously.  It  was  dear  that  this  statement 
could  not  apply  to  the  bonds  in  question,  wliich  were  sold  in  March,  1854, 
and,  vrith  the  exception  of  a  statement  made  by  Mr.  Bell,  the  official 
assignee,  of  a  conversation  of  the  16th  of  June  last,  in  wliich  Mr.  Stralian 
was  stated  to  have  told  him  that  Dr.  Griffith's  securities  were  either 
pawned  or  sold,  there  was  nothing  to  nffiict  Mr.  Strahan  with  a  knowledge 
of  the  sale  of  these  bonds  by  Foster  and  Braithwaite  and  the  payment  of 
the  proceeds  of  the  sale  to  Sir  J.  D.  PauL    He  wished  to  know  whether 


132  FACTS,   FAILUEES,   A>'D   FEArDS. 

their  lordships  thought  there  was  evidence  to  go  to  the  jury  as  against 
Mr.  Strahan  ? 

Mr.  Baron  AiDEESON  thought  there  was  evidence  enough  to  go  to  a 

Sir  F.  Thesigeb  wished  to  remind  theu-  lordships  that  £5000  worth  of  , 
Danish  Bonds  had  been  bought  by  the  bank,  and  there  was  no  evidence  > 
that  any  other  customer  except  Dr.  Griffith  held  this  description  of  stock.  ■ 
Dr.  Griffith  had  punctually  received  the  dividends  on  this  stock  so  re-  ; 
placed. 

Mr.  Baron  Aldeeson  thought  there  was  evidence — he  would  not  say  ■ 
how  much  or  how  httle — to  show  that  Strahan  was  a  party  to  the  repre- 
sentation to  Dr.  Griffith  that  the  bank  had  these  particular  bonds  safe  at 
the  time  they  were  all  gone. 

Mr.  Baron  Mabtin  and  Mr.  Justice  Willes  concurred. 

Mr.  James  wished  to  know  whether  the  Court  considered  that  there 
was  any  evidence  as  against  his  chent,  Mr.  Bates  ? 

Mr.  Baron  Aldeeson  thought  there  was.  The  evidence  was  indeed 
rather  stronger  as  against  Bates,  because  he  seemed  to  have  been  taking  a 
more  active  part  in  the  affairs  of  the  bank  than  the  others. 

Sir  F.  Thesigeb  then  rose  to  address  the  jury  in  defence  of  Strahan. 
He  said — May  it  please  your  lordships  and  gentlemen  of  the  jury,  I  rise 
to  address  you  vmdcr  feelings  of  greater  pain  and  anxiety  than  I  ever  ex- 
perienced on  a  similar  occasion  before,  and  that  pain  and  anxiety  have  not 
been  lessened  by  an  observation  which  was  made  by  one  of  your  lordships 
in  reply  to  an  appUcation  which  I  felt  it  my  duty  to  make  on  behalf  of 
Mr.  Strahan,  with  reference  to  the  position  of  the  case  now  that  the  evi- 
dence for  the  prosecution  is  closed.  My  learned  friend  the  Attorney- 
General,  with  that  feeling  and  forbearance  in  the  conduct  of  the  prose- 
cution which  invariably  characterize  him,  has  told  you  that  the  gentlemen 
now  before  you  have  for  many  years  maintained  a  high  position  in  society, 
and  a  character  of  the  highest  honour  and  integi-ity.  I  cannot  forget  the 
Ijosition  of  Mr.  Strahan,  possessed  of  wealth  and  station,  respected  by 
numerous  friends,  surrounded  by  an  affectionate  family,  and  when  I  con- 
trast that  former  position  with  his  appearance  to-day,  I  feel  almost  dis- 
abled from  performing  the  task  which  I  have  been  called  upon  to  undertake. 
But  these  circumstances  alone  would  not  create  the  embarrassment  which 
exists  in  my  mind  in  undertaking  the  defence  of  this  gentleman.  I  am 
not  insensible  to  the  fact,  that  for  weeks  and  weeks  pubUcations  have  ap- 
peared in  the  papers  in  wliich  the  conduct  of  these  gentlemen  has  been 
strongly  arraigned,  and  every  prejudice  excited  against  them  in  the  pubHc 
mind.  It  is  the  boast  of  this  country  that  every  person  accused  is  re- 
garded as  innocent  imtil  a  jury  of  his  countrymen  find  a  verdict  of  guilty 
against  liim.    And  yet  these  gentlemen  have  now  been  for  many  montlis 


FACTS,   FAILUBES,  ASD  TSAUDS.  183 

brought  before  the  bar  of  public  opinion.  They  appear  before  you  oon- 
dcmncd  by  that  voice,  and  you  are  supposed  impartially  to  judge  upon 
their  case  \mder  these  circumstances.  Juries  are  generally  warned  that 
they  must  dismiss  entirely  from  their  minds  all  that  they  have  heard  before 
they  assembled  in  court.  Gentlemen,  it  is  utterly  impossible  when  once 
any  idea  or  opinion  has  obtained  admission  into  the  human  mind  to  dis- 
miss it,  and,  indeed,  the  effort  to  dismiss  it  would  only  fix  it  the  more 
firmly  there.  What  I  ask  and  expect  from  you  is,  that  you  will  clearly 
discriminate  between  the  impressions  you  have  received  from  the  publica- 
tions to  which  I  have  adverted,  and  the  evidence  that  you  have  now  re- 
ceived on  oath,  and  upon  which  alone  you  will  have  to  determine  the  guilt 
or  innocence  of  these  parties.  I  do  ask,  and  I  do  expect,  that  you  will  do 
that  simply  as  an  act  of  justice  which,  if  it  Avere  your  misfortune  to  stand 
in  a  similar  position,  you  would  expect  to  be  done  to  you.  Gentlemen,  I 
trust  that,  when  I  call  your  attention  and  that  of  my  lords  to  the  charge 
against  Mr.  Strahan,  and  to  the  evidence  which  has  been  brought  to 
establish  that  charge,  whatever  hasty  impression  you  may  have  taken  up — 
whatever  opinion  you  have  conceived  on  a  partial  view  of  the  circxmi- 
stances — will  be  removed  by  a  careful  and  considerate  judgment  upon  the 
facts  that  have  been  submitted  to  you.  If  I  only  succeed  in  placing 
clearly  and  intelligibly  before  you  the  position  of  Mr.  Strahan  in  this  case, 
as  it  is  proved  in  the  evidence,  I  am  under  no  apprehension  whatever  that 
impartial  justice  will  not  bo  administered  to  him.  Gentlemen,  I  am  not 
here  for  one  moment  to  deny  that,  in  the  month  of  April,  1855,  Mr.  Strahan 
did,  unhappily,  in  a  moment  of  pressure,  agree  to  apply  certain  securities 
of  his  customers,  for  the  purpose  of  relieving  the  necessities  of  the  bank 
at  that  present  moment.  I  am  not  here  for  one  moment  to  justify  such  an 
act.  It  is  not  the  act  into  which  you  are  to  inqtiire,  but  it  may,  and  per- 
haps must,  create  a  prejudice  in  your  minds;  and  I  am  anxious  to  warn 
you  against  allowing  it  to  exercise  any  improper  influence  upon  you.  It  is 
most  lamentable  to  think,  that  a  gentleman  who  had  so  long  maintained  a 
character  for  honour  and  integrity,  should  have  fallen  away  in  a  moment 
of  temptation.  It  is  the  most  extraordinary  illustration  of  that  solemn 
warning  which  cannot  be  repeated  too  often — "  Let  him  that  thinketh  he 
Btandeth  take  heed  lest  he  fall."  It  requires  the  labour  of  a  whole  life  to 
build  up  a  character  for  honour  and  virtue,  which  in  one  fatal  and  im- 
guarded  moment  may  be  entirely  destroyed.  Although,  therefore,  I  do  not 
defend  the  act  to  which  Mr.  Stralmn  was  unfortunately  a  party  in  1855, 
yet  the  case  which  you  are  now  considering  against  him  is  the  charge  of 
having  misappropriated  the  property  of  his  customers  in  March,  1854 ; 
and  I  pray  your  attention  to  the  evidence  upon  which  it  is  sought  to  fix 
hun  with  that  act.  The  learned  counsel  proceeded  to  say,  tliat  the  indict- 
ment contained  various  counts  applicable  to  the  appropriation  of  Dr.  Grif- 


134  FACTS,   TAILUHES,   AUB   TRArDS. 

fith's  bonds  in  the  year  1854.  An  observation  bad  di'opped  from  one  of 
the  learned  judges,  calculated  to  convey  an  erroneous  impression  Tvith 
regard  to  the  act  of  one  partner  crimiaally  affecting  another.  Although  it 
was  true  that  in  civU  proceedings  the  act  of  one  partner  affected  another, 
yet  he  would  declare  with  the  utmost  confidence,  that  if  this  were  declared 
to  be  the  law  in  criminal  cases,  it  would  be  the  first  time  that  such  a 
doctrine  had  ever  been  promulgated  from  the  bench  in  any  Enghsh  court 
of  justice. 

Mr.  Baron  AideeSOIT  intimated  that  no  such  opinion  had  fallen  from 
him. 

Sir  F.  Thesigee  would  briefly  call  the  attention  of  the  jruy  to  the 
state  of  the  law  previously  to  the  passing  of  the  act  of  the  7th  and  8th  of 
George  IV.,  chap.  29.  In  the  year  1812,  if  a  banter  or  agent  of  any  de- 
scription, having  the  property  of  a  customer  intrusted  to  him,  misappro- 
priated or  converted  it  to  his  own  use,  he  was  not  guilty  of  any  criminal 
act,  although  he  was  responsible  to  his  principal  or  customer  upon  any 
civil  proceeding.  This  great  defect  in  the  law  was  not  discovered  until 
one  "Welch,  a  stockbroker,  sold  out  certain  stock  belonging  to  Su'  E.  Plum- 
mer,  Master  of  the  Eolls.  Welch  applied  the  produce  of  the  sale  to  his 
own  use,  and  absconded.  He  was  tried  and  was  found  not  guilty  of  a 
criminal  offence.  An  Act  of  Parliament  was  therefore  passed,  by  which 
any  banker  or  agent  who  should  sell  and  appropriate  to  his  own  use  the 
securities  of  his  customers  without  their  authority,  was  Hable  to  conviction 
for  a  misdemeanour.  A  clause  was  introduced  into  the  Act  that  the  penalty 
annexed  should  not  extend  to  any  partner  or  partners,  imless  such  partner 
or  partners  should  commit  or  be  privy  to  such  offence.  Another  Act  after- 
wards passed  to  make  factors  who  should  pledge  the  goods  of  then-  prin- 
cipals answerable  in  a  criminal  proceeding.  This  and  the  previous  statute 
were  embodied  in  the  7th  and  8th  of  George  IV.,  chap.  29,  which  apphed 
both  to  bankers  and  factors.  Wliat  the  jury  had  to  decide — apart  from 
all  prejudice  and  influence  exercised  by  the  pubHc  press,  and  apart  from 
any  feeUng  which  they  might  entertain  of  the  impropriety  and  iounorality 
of  Mr.  Strahan's  conduct  in  1855 — ^was,  whether  there  existed  sviflicient 
proof  that  Mr.  Strahan  was  privy  to  the  act  of  seUing  the  bonds  in  question 
by  Foster  and  Braithwaite,  in  March,  1854'.  He  was  anxious,  in  defending 
Mr.  Strahan,  not  to  prejudice  by  any  observations  of  his  the  case  of  the 
other  defendants,  but  he  was  necessarily  compelled  to  advert  to  the  course 
taken  by  Sir  J.  D.  Paul,  with  respect  to  the  sale  of  the  bonds  at  the  time 
he  had  mentioned.  It  was  perfectly  clear  that  no  other  of  the  partners 
except  Sir  J.  D.  Paul  interfered  to  xorocure  the  sale  of  the  Danish  bonds  by 
Foster  and  Braithwaite.  Sir  J.  D.  Paul  apphed  to  Mr.  Beattie  for  a  loan 
from  the  National  Insurance  Society,  and  when  Mr.  Beattie  stated  that  his 
company  were  not  in  the  habit  of  advancing  money  upon  foreign  secm-ities, 


FACTS,  TAILVBES,  AKD  rHAUCS.  135 

he  entreated  Mr.  Beattie  to  dispose  of  them.  No  douht  the  very  bonds 
now  in  court  were  sold  by  Foster  and  Braithwaite,  and  that  a  cheque  for 
£12,281,  drawn  by  Mr.  Beattie,  and  paid  in  bank-notes,  was  received  by 
Sir  J.  D.  Paul  himself.  This  sum  was  not  traced  after  its  receipt  by  Sir 
J.  D.  Paul ;  but,  oven  supposing  be  entered  this  sum  in  the  books  of  tho 
bank  to  the  credit  of  the  firm,  that  would  not  be  proof  in  a  criminal  pro- 
ceeding that  Mr.  Straban  or  the  other  partners  were  privy  to  the  act, 
because  there  was  nothing  to  indicate  what  the  natiire  of  the  credit  was, 
and  the  fact  of  the  credit  could  only  be  known  after  the  act  had  been  done. 
The  money  could  not  have  been  received  until  after  the  act  charged  had 
been  done,  and  tho  mere  knowledge  of  tho  credit  did  not  show  any  partici- 
pation in  tlie  act.  The  jury  were  called  upon  to  decide  upon  a  criminal 
charge  which  might  be  followed  by  the  most  serious  consequences,  and  they 
were  not  to  assume  without  any  proof  that  Mr.  Strahan  must  have  had  a 
knowledge  of  this  transaction.  Everything,  indeed,  indicated  an  absence 
of  such  knowledge  on  his  part.  The  £5000  of  Danish  Five  per  Cent,  bonds, 
belonging  to  Dr.  Griffith,  having  been  disposed  of  in  March,  1834',  in  June, 
1854,  the  same  amount  of  Danish  Bonds  was  purchased  by  Sims  and  Hill 
for,  and  deUvered  to,  Strahan  and  Co.  There  was  no  doubt  that  the  divi- 
dends on  these  bonds  were  received  by  Strahan  and  Co.  for  Dr.  Griffith,  and 
that  he  was  credited  with  tho  dividends  in  his  pass-book  in  September, 
1854,  and  March,  1855.  There  was  nothing  to  lead  the  jury  to  beheve 
that  Mr.  Strahan  was  in  the  shghtcst  degree  aware  of  the  disposal  of  the 
former  bonds  of  Dr.  Griffith,  and  the  substitution  of  those  bonds  on  which 
the  dividend  had  been  paid.  He  now  came  to  the  conversations  upon 
which  liis  learned  friend  rehcd  to  fix  Mr.  Strahan  with  the  guilty  knowledge 
of  the  transaction  of  1854.  Dr.  Griffith  asked  Mr.  Strahan  about  his  se- 
curities. Mr.  Strahan  said  they  had  been  taken  into  the  City,  either  to 
Overend's  or  Bumand's.  It  was  clear  that  this  statement  could  not  apply 
to  the  sale  of  the  Danish  Bonds  in  1834.  Mr.  Strahan  tlien  told  Dr.  Grif- 
fith, "  I  assure  you  it  is  the  first  dishonest  act  of  my  life.  I  never  defrauded 
a  man  of  sixpence ;"  and  he  added  tliat  this  had  happened  six  weeks  ago. 
But  liifl  learned  friend  was  xising  this  confession  of  a  dishonest  act  in  1855 
to  affect  Mr.  Straban  upon  a  charge  of  disposing  of  bonds  in  1854.  No 
doubt  if  Mr.  Strahan  were  a  party  to  tho  transaction  of  1854,  it  was  an 
equally  dishonest  act  with  that  of  1855.  Mr.  Strahan  said  notliing  about 
1854,  but  he  said,  "  Tliis  is  the  first  dishonest  act  of  my  life,  and  it  was 
dona  six  weeks  ago."  With  respect  to  tho  evidence  of  Mr.  Bell,  that 
gentleman  was  not  very  clear  in  his  recollection ;  but  lie  would  ask  tho 
jury  in  clmrity  to  consider,  if  Mr.  Strahan  really  said  that  tho  securities 
were  pawned  or  sold,  that  he  was  applying  his  observations  to  the  only 
transaction  within  his  knowledge,  namely,  that  of  the  month  of  April  in 
the  present  year.    Ho  believed  he  had  stated  the  whole  of  the  evidence  oa 


136  TACTS,   FAILUnES,   A>'D   PIIAUDS. 

wMch  the  jury  could  be  called  criminally  to  convict  Mr.  Strahan  on  this 
serious  charge.  He  believed  that  if  the  pubHc  mind  had  not  been  directed 
to  tliis  case  with  a  great  deal  of  cm-iosity,  they  -would  not  have  heard  of 
there  being  any  case  upon  such  evidence  to  fix  Mr.  Strahan  with  any  par- 
ticipation in  the  guilt  of  this  transaction.  Both  on  the  counts  respecting 
the  pledging  of  these  securities,  and  on  the  counts  of  conspiracy  to  pledge 
them,  he  maintained  that  there  was  no  evidence  against  Mr.  Strahan.  The 
learned  gentleman  then  referred  to  the  disclosure  made  by  Mr.  Strahan 
before  the  Court  of  Bankruptcy,  which,  he  said,  had  been  made  faithfully 
by  that  gentleman  in  respect  to  all  the  circumstances  within  his  own  know- 
ledge. Before  1812,  this  misapplication  by  bankers  or  other  agents  of  the 
property  of  their  principals  was  only  subject  to  civil  proceeduig,  and  was 
not  a  criminal  act  until  made  so  by  the  statute  passed  in  the  52nd  of 
George  III.  That  provision  had  been  enlarged  and  expanded  by  subse- 
quent enactments,  providing,  at  the  same  time,  that  where  a  person  had 
made  certain  disclosures,  tinder  compulsory  process,  in  a  court  of  law,  he 
should  not  be  indictable  on  that  account.  The  7th  and  8th  of  George  IT. 
enlarged  the  privilege,  and  extended  it  to  the  case  of  examinations  before 
the  Commissioners  for  Bankruptcy.  From  something  that  fell  from  the 
Attorney- General,  he  was  inclined  to  beheve  that  his  learned  friend  meant 
to  say  that  this  disclosure  on  the  part  of  the  bankrupts  was  voluntaiy,  and 
not  compulsory,  and,  therefore,  to  that  the  act  did  not  apply.  He  thcuglit 
that  point  must  fail,  for  a  bankrupt  was  bound,  under  the  Act  of  Parlia- 
ment, to  make  a  fuU  disclosure  connected  with  his  property.  Now,  what 
was  the  disclosure  made  by  Mr.  Strahan  ?  He  solemnly  declared  he  knew 
nothing  but  the  pledging  of  Dr.  GrfBth's  bonds  to  Messrs.  Overend,  Gm-ney, 
and  Co.,  in  AprO,  1855,  and  the  whole  of  his  disclosure  amounted  to  demon- 
stration clear  that  he  was  ignorant  of  any  previous  transaction  with  respect 
to  these  bonds.  There  was  not  the  slightest  evidence  of  the  participation 
of  Mr.  Strahan  in  the  transaction  of  1854.  If,  then,  Mr.  Strahan  knew 
notliing  more  than  the  transaction  of  1855,  and  if  be  disclosed  that  fully, 
then  he  would  be  rightly  entitled  to  that  defence,  which  he  might  use  as  a 
shield  against  the  present  assault  on  him.  With  respect  to  the  conspiracy 
coimts,  he  maintained  that,  supposing  the  defendants  relieved  by  the  dis- 
closures they  made  from  the  charge  of  any  criminal  act,  they  co\dd  not  be 
rendered  liable  for  a  conspiracy  to  do  that  act.  In  conclusion,  the  hon. 
and  learned  gentleman  earnestly  and  anxiously  entreated  the  jury  to  look 
carefully  at  the  whole  evidence,  and,  apart  from  aU  prejudices,  to  consider 
■what  it  was  that  was  charged  against  the  parties  on  this  occasion,  and  what 
was  the  evidence  against  Mr.  Strahan ;  and  he  expressed  the  most  entire 
confidence  that,  according  to  the  first  principles  of  the  criminal  law,  as 
administered  in  this  coimtry,  Mr.  Strahan  had  not  been  alTected  by  any 


FACTS,   rAILTJBES,   A>'D   FIIAUDS.  137 

evidence  •mth  respect  to  the  particular  transaction  on  which  the  verdict  of 
the  jury  was  to  be  taken. 

Mr.  Serjeant  Btles  fully  participated  in  the  feelings  expressed  by  his 
learned  friend,  and  believed  that  a  more  painfid  spectacle  than  the  present 
had  seldom  been  exhibited  in  a  court  of  justice.  He  conceived  that  the 
anguish  of  mind  the  present  position  of  the  defendants  must  have  caused 
them  was  adequate  punishment  for  any  act  of  theirs  done  in  an  unguarded 
moment,  and  under  the  pressure  of  the  most  irresistible  distress.  He 
should  not  have  begun  with  these  observations  if  he  did  not  know  that 
their  case  had  been  prejudiced,  and  that  they  had  been  tried  and  condemned 
by  the  press,  on  the  leaves  of  which  we  lived,  and,  Uke  other  insects,  took 
our  colour  from.  Ex  parte  statements  had  appeared  in  the  columns  of 
the  daily  press,  and  he  should  not  be  doing  his  duty  if  he  did  not  allude 
to  them.  Sir  J.  Paul  had  been  charged  with  being  a  rehgious  man  only 
for  his  own  selfish  gains ;  and  of  assuming  the  character  of  a  benevolent 
person  only  to  attract  charitable  societies  to  his  bank,  which  societies  he 
afterwards  caused  to  be  great  losers  by  his  failure.  That  was  an  utter 
calumny.  He  was  a  benevolent  man  from  his  own  means  while  yet  young 
and  when  his  father  was  living,  and  his  charity  was  evinced  in  supporting 
incumbents  in  poor  places,  and  not  in  niggardly  advancing  his  own  in- 
terests. There  were  witnesses  in  thit  court  to  the  truth  of  what  he  was 
saying,  and  even  the  prosecuting  counsel  himself  had  declared  that,  until 
the  date  of  the  transactions  into  which  they  were  now  inquiring,  Sir  J.  Paul 
was  considered  a  person  of  unquestioned  integrity  and  honour.  He  did 
not  deny  that  these  bonds  were  disposed  of  by  Sir  J.  D.  Paul,  but  upon 
the  failure  of  Gkindell  for  £300,000,  who  was  largely  indebted  to  the  bank. 
Sir  J.  D.  Paul  was  desirous  of  raising  money  on  these  bonds.  He  did  raise 
money  upon  them,  but  with  the  full  intention  of  replacing  them  imme- 
diately, which  he  did.  He  bought  the  same  number  of  bonds  back  in  the 
following  June,  and  replaced  them  at  a  sacrifice.  He  paid  Dr.  Griffith  the 
dividends  on  these  bonds,  so  that  the  doctor  sustained  no  loss  of  interest; 
and  it  was  for  selling  these  bonds  on  the  16th  of  March,  and  buying  them 
on  the  1st  of  June  following,  at  an  advance,  that  Sir  J.  D.  Paul  was  now 
on  his  trial  before  the  jury.  Sir  J.  D.  Paul  did  not  instruct  him  to  say, 
and  he  did  not  say,  that  in  raising  this  money,  although  he  replaced  the 
bond.'!,  was  not  doing  wrong.  Sir  J.  D.  Paul  admitted  he  did  wrong,  but 
he  replaced  Dr.  Griffith's  bonds  at  a  loss  to  himself. 

Mr.  Baron  Aldebson — Is  it  quite  certain  he  did  replace  them? 

Mr.  Serjeant  Bi'LES — I  do  not  say  he  replaced  the  identical  bonds. 

Mr.  Baron  Aldeeson — Probably  the  £5000  by  which  they  were  re- 
placed was  the  property  of  his  assignees. 

Mr.  Serjeant  BxLSS  said,  it  was  clear  that  the  bonds  which  were  par* 


18S  FACTS,    TATLTJEES,   AJTD   TEAUDS. 

cliased  in  June,  1854,  were  substituted  for  the  bonds  that  were  originally- 
used.  All  the  dcfenJants  could  do  was  to  buy  similar  bonds,  and  tliis 
purchase  of  bonds  of  the  same  kind  and  amoimt  was  the  same  as  if  the 
same  bonds  had  been  bought.  When  the  affairs  of  the  bank  came  into  the 
Bankruptcy  Court,  it  was  Sir  J.  D.  Paul's  duty  to  make  a  disclosure  of 
•what  he  had  done,  and,  having  made  a  full  disclosure  of  all  his  dealings,  he 
was  no  longer  liable  to  criminal  proceedings.  The  petition  for  adjudication 
was  not  sued  out  in  the  Court  of  Bankruptcy  with  any  view  to  these  pro- 
ceedings. The  Attorney-General  said  that  this  was  a  voluntary  step,  but 
a  bankrupt  was  obliged  to  make  a  full  disclosure  of  all  his  acts.  The  ex- 
amination was  compulsory,  and  the  point  was,  whether  the  questions  put 
by  the  assignees  and  the  answers  given  were  such  a  disclosure  as  the  act 
contemplated.  This  point  of  law  would  be  determined  by  their  lordships 
as  to  them  would  seem  fit. 

Mr.  James  said,  he  should  rest  the  case  of  the  defendant  Bates  upon 
his  total  ignorance  of  the  sale  of  tlie  Danish  bonds  through  Foster  and 
Braithwaite.  There  was  an  entire  absence  of  any  evidence  to  show  that 
he  was  a  party  to  that  sale.  The  mere  fact  that  Mr.  Bates  was  a  partner 
in  the  firm  in  1854,  was  not  enough  to  fix  him  with  the  criminal  conse- 
quences of  this  alleged  transaction.  The  transaction  of  the  16th  of  March, 
1854,  was  the  transaction  of  Sir  J.  Paul,  and  Mr.  Bates  was  not  impli- 
cated in  it ;  and  after  the  pledghig  of  the  bonds  to  Overend,  Gurney,  and 
Co.  became  known  to  Mr.  Bates,  he  discovered  the  whole  transaction. 
There  was  not  a  tittle  of  evidence  to  show  that  he  was  aware  of  the  former 
transaction.  A  man  might  be  deceived  by  his  partner  having  the  financial 
management  of  a  bank,  and,  in  respect  to  a  criminal  charge  of  a  most 
serious  nature,  the  punishment,  on  the  first  principles  of  moral  justice, 
should  faU  only  on  the  guilty.  Even  the  Attorney-General  had  expressed 
some  doubt  whether  the  charge  was  fully  brought  home  to  Mr.  Bates. 
He  knew  the  importance  of  this  trial,  involved  as  it  was  with  the  interests 
of  commerce.  Probably,  many  within  the  sound  of  his  voice  might  have 
severely  suffered  from  the  fall  of  this  house,  once  so  respectable.  It  was 
perfectly  possible  that  the  jury  might  be  attacked  by  the  press  for  giving 
a  fearless  and  discriminating  verdict ;  but  still  he  felt  confident  that  they 
would  discharge  their  duty  firmly.  He  asked  for  Mr.  Bates  no  more  than 
strict  impartiahty  and  a  minute  examination  of  the  evidence,  and  then  he 
confidently  anticipated  that  they  would  find  a  favourable  verdict  in  the 
case  of  his  client. 

The  case  was  here  adjourned  until  the  next  morning.  It  being  a 
charge  of  misdemeanour  only,  the  jury  were  allowed  to  depart,  and  the 
defendants  were  also  permitted  to  be  at  large,  upon  renewing  the  recog- 
nizances and  bail  under  which  they  had  surrendered.     The  bail  of  Mr. 


TACTS,  rAILIJnES,  AND  FIIAUDS.  139 

Bates  only  being  in  attendance,  tli©  other  two  defendants  were  detained  in 
custody. 


The  trial  was  resumed  the  following  morning  (October  27),  at  ten 
o'clock.  Baron  Alderson,  Baron  Pollock,  and  Mr.  Justice  WiUes  having 
taken  their  scats. 

The  Attobxet-Geiteeal  inquired  of  the  Court  what  course  should  bo 
taken  in  reference  to  the  decision  upon  the  point  raised  on  behalf  of  the 
defendants,  that  having  made  a  full  declaration  under  the  fiat  of  bank- 
ruptcy they  were  not  criminally  liable. 

Mr.  Baron  Aidebsox — ^That  will  be  a  question  entirely  for  the  Court, 
and  not  for  the  juiy.  The  question  is,  what  is  meant  by  the  word  "  dis- 
closure" in  the  Act  of  Parliament,  whether  it  means  something  that  was 
known  before  or  something  that  was  not  known  before.  If  the  Court 
should  be  of  opinion  that  tlio  disclosure  made  is  that  contemplated  by  the 
Act,  then  it  will  be  our  duty  to  instruct  the  jury  that  there  is  no  evidence 
before  them. 

Mr.  Serjeant  Bxles — In  this  case  the  disclosure  is  complete.  The 
bankrupts  surrendered.  They  said,  "  Here  we  are,  and  this  is  what  we 
have  done  with  the  bonds." 

Mr.  Lawrance  AbrahaU,  Registrar  of  the  Court  of  Bankruptcy,  put  in 
the  formal  record  of  the  proceedings  in  bankruptcy,  and  the  disclosiu*e3  of 
the  bankrupts  made  in  tlie  course  of  their  examination  at  the  Bankruptcy 
Court  as  to  the  disposal  of  the  £5000  Danish  Bonds,  which  forms  the 
subject  of  the  indictment — their  sale  in  March,  1854 — the  purchase  of 
other  bonds  subsequently,  and  the  depositing  of  these  with  Overend, 
Qurney,  and  Co.,  in  April. 

Mr.  Lewis,  attorney  for  the  defendants  Paul  and  Strahan,  examined  by 
Serjeant  Btxes — The  defendants  consulted  me  after  their  stoppage,  and  it 
was  by  their  advice  that  the  statements  read  were  prepared.  They  con- 
sulted me  with  a  view,  amongst  other  things,  of  making  the  disclosures 
within  the  statute.  That  statement  was  produced  to  the  Commissioners, 
and  the  bankrupts  requested  that  it  might  be  handed  in  as  their  statement 
with  reference  to  the  securities  they  had  received  from  customers,  and  the 
manner  of  their  disposal. 

The  AxTOEyET-GENEHAX — Not  with  reference  to  these  solely. 

Witness — As  to  the  securities  generally,  and  the  manner  of  their  dis- 
X)OsaI. 

By  Serjeant  BnE3 — The  commissioner  stated  that  as  no  creditor  asked 
for  them,  the  bankrupts  might  hand  them  in,  if  they  thought  fit,  to  the 
official  assignee.  The  statement  was  then  handed  in,  with  the  deposition 
which  appears  upon  it,  and  which  has  just  been  read.    To  tlie  best  of  my 


140  FACTS,  FAILUEES,  AKD  FEAUDS. 

recollection,  the  commissioner  (Evans)  signed  it.  (It  was  signed.)  After 
that  the  solicitor  to  the  fiat,  Mr.  Lawrance,  placed  the  account  in  the 
Lands  of  the  official  assignee,  and  then  examined  each  bankrupt  separately 
as  to  the  truth  of  the  statements  contained  in  it.  He  asked  each  bankrupt, 
separately — "  Is  this  a  true  account  of  all  securities  of  any  customers  at 
any  time  pledged  or  converted  by  you  ?"  They  answered,  "  Yes."  The 
question  and  answer  were  reduced  to  writing,  and  signed  by  the  bank- 
rupts. 

Cross-examined  by  the  Attoeney-Geneeal — Did  not  Mr.  Parry  apply 
to  be  allowed  to  examine  them  as  to  the  truth  of  the  statements  they  had 
handed  in  ? 

Witness — Yes  ;  with  reference  to  the  securities,  the  account  of  which 
had  been' handed  in. 

Cross-examination  continued — The  commissioner  said,  that  if  anv  such 
application  were  made  by  a  creditor,  he  would  allow  it,  but  on  the  bank- 
rupts' own  application  he  refused.  Mr.  Parry  then  said  that  he  tendered 
this  declaration  of  the  bankrupts  as  the  declaration  required  under  the 
Bankruptcy  Act,  and  he  added  that  they  had  a  right,  under  the  statute,  to 
put  it  in.  Did  not  hear  Mr.  Parry  say  to  Mr.  Lawrance,  "  Do  you  wish 
to  ask  the  bankrupts  any  questions  ?"  It  might  have  been  said,  but  I  was 
engaged  at  the  time.  Mr.  Lawrance  refused  to  aid  me  in  any  way  in 
bringing  up  the  bankrupts  from  the  House  of  Detention,  when  they  were 
in  custody,  and  I  had  to  apply  to  another  commissioner  for  a  warrant  for 
that  purpose.  They  had  been  examined  at  Bow  Street  on  that  day  upon 
the  charge  preferred  against  them  by  Dr.  Griffith.  It  was  after  their  ex- 
amination before  the  magistrate  that  I  applied  to  have  them  brought  up. 

Mr.  Serjeant  Byles  put  in  the  bankrupts'  stock-book,  in  which  accounts 
of  the  purchases  and  sales  of  slock  and  sureties  were  entered.  He  was 
instructed  that  this  book  contained  nothing  with  regard  to  Dr.  Griffith's 
securities. 

Baron  Aldeeson — Then  I  cannot  see  how  it  will  help  you.  I  will 
make  a  note  that  it  contains  nothing  affecting  those  securities. 

Mr.  Serjeant  Btles — I  put  it  in  in  case  the  Attorney- General  should 
wish  to  examine  it.  The  learned  counsel  then  put  in  the  bankrupts'  ledger, 
in  which  was  an  entry  on  the  credit  side  of  £12,281  As.,  the  produce  of 
the  bonds  sold  on  the  16th  of  March,  1854,  and  on  the  debit  side,  under 
date  15th  June,  an  entry  of  £5100,  as  the  purchase-money  of  the  substi- 
tuted bonds  which  were  afterwards  deposited  with  Overend  and  Co. 

Mr.  Bois,  clerk  to  Overend  and  Gurney,  proved  the  depositing  of  the 
bonds  with  this  house  by  Mr.  Young,  the  solicitor,  who  it  afterwards  ap- 
peared had  borrowed  the  money  upon  them  for  Sir  John  Paid,  his  client. 
The  witness  identified  the  numbers  of  these  bonds.  They  were  deposited 
■with  Overend  and  Gurney  on  the  30th  of  April,  1855. 


TACTS,   FAILUBES,   AKD  FBAUDS.  141 

Mr.  SaToiy  was  recalled  to  prove  that  the  dlTidends  had  been  regulorlf 
paid  on  the  substituted  bonds,  but 

Mr.  Baron  Aldeesox  said  it  was  clear  that  the  money  had  been 
credited  regularly  as  it  became  due. 

This  closed  the  case  for  the  defence. 

The  Attoexet-Genehal  then  proceeded  with  his  reply.  He  dis- 
claimed all  intention  to  act  harshly  against  the  defendants,  but  simply  to 
carry  out  the  ends  of  justice.  The  ease  divided  itself  into  two  distinct 
points.  The  first  was  for  the  jury ;  the  second  for  their  lordships — the 
one  whether  the  evidence  was  sufBcient  to  convict,  supposing  the  indict- 
ment could  be  sustained  after  the  disclosures  under  the  bankruptcy  ;  and 
the  other,  whether,  after  that  disclosure,  there  w^as,  in  fact,  any  evidence 
at  all  to  bring  the  defendants  within  the  statute.  The  first  question  was, 
had  the  defendants  made  away  with  the  securities  entrusted  to  them,  in 
contravention  of  the  terms  of  the  statute  ?  With  regard  to  one  of  the 
defendants.  Sir  J.  Paul,  it  was  not  denied  that  he  had  made  away  with 
securities,  and  the  defence  ho  relied  upon  was  that  a  full  disclosure  had 
been  made,  and  unless  that  was  held  to  be  sufficient  by  the  court  he  must 
be  found  guilty.  He  admitted  that  the  case  of  the  two  other  defendants 
was  somewhat  diflerent.  His  learned  friend.  Sir  F.  Thesiger,  had  put  tho 
case  as  though  his  client  knew  nothing  whatever  of  what  had  been  done 
by  his  partner  Sir  J.  Paul.  But  his  learned  friend  rested  his  case  wholly 
upon  what  Mr.  Strahan  said  in  his  interview  with  Dr.  Griffith.  But  he 
(the  Attorney-General)  was  not  disposed  to  put  implicit  faith  in  a  state- 
ment made  for  the  purpose  of  avoiding  the  consequences  of  the  criminal 
act  with  which  he  was  charged.  The  strength  of  the  case  as  against 
Strahan  was  not  merely  his  own  declaration,  but  the  proof  that  they  had 
been  disposing  of  tlie  securities  of  their  customers  for  years.  The  dis- 
closures made  under  the  statute  rendered  the  case  ten  times  stronger,  for  it 
showed  that  they  had  carried  on  this  system  to  the  extent  of  upwards  of 
£120,000.  The  ledger  in  which  these  transactions  appeared,  though  it 
purported  to  be  the  private  account  of  Sir  John  Paul,  was  evidently  tho 
account  of  the  firm.  The  entries  were  not  those  of  the  account  of  any  ono 
of  the  partners,  but  evidently  related  to  the  account  of  the  partners  gene- 
rally, in  reference  to  tho  disposal  of  their  customers'  securitiies.  (Tho 
learned  counsel  then  read  tho  items,  which  varied  from  £30,000  down- 
wards, and  generally  tallied  with  tho  amounts  received  upon  tho  sale  or 
mortgage  of  securities,  and  tho  payments  on  the  other  side,  with  tlio 
amounts  paid  for  the  repurchase  or  recovering  such  securities ;  and  ho 
observed  that  in  April,  when  the  firm  were  in  such  a  state  of  extremity 
that  they  were  obliged  to  obtain  advances  from  Overend  and  Gurney,  there 
appeared  a  balance  in  this  ledger,  in  favour  of  Sir  John  Paul,  of  upwards 
of  £27,000.)    Ho  contended  that  this  book,  as  well  as  the  evidence  gene- 


142  PACTS,   FATLITEE3,   AXD   FEATJDS. 

rally,  clearly  proved  ttat  all  the  partners  were  cognizant  of  what  Sir  John 
Paul  did.  Turning  to  another  part  of  the  case,  the  evidence  on  the  part 
of  the  defendants,  his  learned  friend  had  shown  that  Sir  John  Paul  had 
disposed  of  certain  securities,  not  the  securities  originally  deposited  as 
those  of  Dr.  GrifSth,  but  the  securities  substituted  for  them.  The  order 
to  the  broker  to  purchase  the  original  securities  was  given  on  the  authority 
of  the  firm  generally  |  but  if  the  original  securities  were  misappropriated 
by  Sir  John  Paul,  without  the  knowledge  of  the  other  partners,  it  was 
difficult  to  understand  how  they  could  have  been  parties  to  the  repurchase 
and  substitution  of  other  securities,  in  lieu  of  those  so  misappropriated. 
They  said,  "  We  have  made  a  disclosure  of  the  second  transaction,  which 
disclosure  protects  us  from  the  consequences  of  the  first."  With  regard 
to  Sir  John  Paul,  even  assiuning  his  disclosure  as  to  the  transaction  with. 
Overend  and  Gurney  to  be  complete,  that  he  (the  Attorney-General)  appre- 
hended was  no  answer  to  the  case. 

Mr.  Bai'on  Aldeeson — I  own  I  am  certainly  of  that  opinion,  it  is  a 
disclosure  of  that  which  is  no  ofience,  as  an  answer  to  that  which  is. 

The  Attoekex-Geneeal  resumed,  and  contended  that  the  disclosure 
made  under  the  advice  of  Mr.  Lewis,  the  solicitor,  was  not  a  hojid  fide 
disclosure  under  the  bankruptcy  laws,  but  a  disclosure  for  the  purpose  of 
setting  the  creditors  at  defiance,  and  protecting  the  bankrupts  against  the 
consequence  of  their  criminal  acts.  The  disclosvire  was  made  voluntarily 
without  any  examination.  The  commissioner  refused  to  examine  them 
unless  some  creditor  desired  it,  and  as  no  creditor  desired  it  they  were  not 
examined  upon  it. 

Mr.  Baron  Aldeesoit — Whether  that  was  sufficient  or  not  is  a  ques- 
tion, not  for  the  jury,  but  for  the  court. 

Mr.  Serjeant  Byles — I  hope  your  lordship  will  reserve  the  point. 

His  Lordship — If  there  be  any  doubt  in  the  mind  of  the  court,  we 
will  reserve  it,  but  otherwise  I  am  not  disposed  to  reserve  points.  We 
should  not  reserve  it  unless  there  were  a  difference  of  opinion  amongst  the 
judges  in  any  bther  case.  My  own  opinion  is,  that  it  is  not  a  case  for  the 
jury  at  all. 

Baron  Maetiit  also  expressed  his  opinion  that  there  was  no  question 
to  be  put  to  the  jury  in  this  part  of  the  case. 

The  Attoeney-Geneeai,,  after  some  further  remarks,  said  the  question 
for  the  jm-y  was  whether  Mr.  Strahan  and  Mr.  Bates,  or  either  of  them, 
were  parties  to  the  sale  of  the  securities  belonging  to  Dr.  Griffith,  in 
March,  1854. 

Mr.  Baron  AlDEHSON  summed  up.  The  question  was,  did  the  defend- 
ants sell  the  securities  of  Dr.  Griffith  contrary  to  their  trust.  If  so,  they 
were  guilty  of  the  misdemeanour.  As  against  Sir  J.  D.  Paul,  the  case 
pressed  more  hardly  than  against  either  of  the  others,  and  as  against  Strahan 


FACTS,   FAILURES,   AND    IBAUD3.  143 

more  hardly  than  against  Bates,  that  would  probably  bo  tlie  order  in  wbich 
tie  jury  would  have  to  consider  the  quest  ■•Hi  as  to  the  guUt  of  the  parties. 
His  Lordship  then  recapitulate>\  the  evid-jnco  of  Dr.  Griffitli,  showing  that 
he  ordered  the  defendants  tc  purchase  the  bonds,  and  keep  them  in  safe 
custody,  the  fact  of  their  purchojc-,.  their  subsequent  sale  witliout  authority, 
the  appropriation  of  the  procccfi"  to  their  own  purposes,  the  particulars  of 
the  interview  between  Dr.  Griffith  and  Strahan  after  the  bank  had  failed,  in 
which  the  latter  stated  that  the  bonds  had  been  disposed  of  in  such  a 
manner  that  Dr.  Griffith  could  not  get  at  them,  and  that  he  (Strahan)  was 
as  much  responsible  for  the  transaction  as  Sir  John  Dean  Paul,  and  that 
that  was  the  first  dishonest  transaction  ho  had  been  engaged  in  in  his  life, 
and  the  defence  set  up  that  this  conversation  related  entirely  (in  so  far  as 
Strahan  was  concerned)  to  the  transaction  of  the  deposit  of  bonds  with 
Overend  and  Gumey  in  April ;  and  remarked  that  the  jury  must,  of  course, 
take  into  consideration  the  circimistances  under  which  that  statement  was 
made,  warrants  having  been  issued  at  the  time  to  apprehend  the  defendants 
on  the  criminal  charge.  The  evidence  of  Alexander  Beattie  proved  the 
pressure  upon  the  bank  in  1853-4,  and  the  sale  of  the  bonds  through  Mr. 
Beattie's  brokers,  Foster  and  Braithwaite,  and  the  payment  of  the  money 
over  to  Sir  John  Paul  by  an  open  cheque  of  IMr.  Beattie's,  instead  of  by 
the  cheques  given  by  the  stock-brokers.  There  was  no  doubt,  therefore,  of 
the  sale  of  the  bonds  by  Sir  John  Paul,  as  charged  in  the  indictment.  The 
act  of  breach  of  trust  was  clear  as  against  him  ;  and  unless  the  disclosure 
under  the  fiat  of  bankruptcy  exonerated  him,  he  was  liable  to  punishment. 
As  to  the  complicity  of  the  other  two  defendants,  he  observed  that  a  partner 
was  responsible  civilly  for  the  acts  of  his  co-partner,  but  not  criminally. 
In  a  criminal  act,  to  make  a  man  liable  he  must  be  personally,  in  some  way 
or  other,  a  party  to  the  act,  that  was,  if  ho  did  not  personally  perform  or 
take  part  in  the  act  itself,  he  must  authorize  it  some  way  or  other,  or  be 
cognizant  of  it.  At  the  same  time,  it  must  not  be  forgotten  that  Strahan 
and  Bates  were  partners,  and  as  such,  must  naturally  bo  supposed  to 
know  of  what  was  going  on  in  the  concern,  and  it  was  for  the  jury  to  say, 
whether,  as  being  partners,  they  did  not  know  of  the  transaction.  In  the 
first  place,  the  money  paid  by  Foster  and  Braithwaite,  on  account  of  the 
bonds  sold,  was  entered  in  Sir  J.  Paul's  book,  and  the  aggregate  of  the  sale, 
£12,281  55.,  was  brought  to  the  credit  of  the  bank.  This  was  an  import- 
ant point  for  consideration.  Then  it  must  be  prestmned  that  the  partners 
were  generally  aware  of  the  securities  in  their  strong  room,  and  whether 
any  of  them  were  abstracted.  It  did  not  follow,  however,  that  they  were 
necessarily  aware  of  such  abstraction  ;  but  this  was  one  among  other  mat- 
ters in  the  evidence  which  the  jury  would  have  to  consider.  In  reference 
to  the  disclosure  before  the  Court  of  Bankruptcy,  it  was  to  be  observed  that 
Strahan'fl  declaration  «poke  of  the  £10,000  bonds  converted,  but  not  of  the 


144  FACTS,   FAILUEES,   A2fD  TEAUDS. 

£5000,  and  stated  that  the  account  rendered  was  a  true  account  of  the 
bonds  and  securities  converted  by  him.  With  regard  to  Bates,  the  case 
was  less  strong,  as  to  his  knowledge  of  such  conversion,  in  so  far  as  his 
declaration  went,  for  he  gave  the  account  as  that  of  securities  converted, 
not  by  him  personally,  but  by  the  firm.  Passing  from  the  circumstances 
of  the  case,  as  they  appeared  in  evidence,  he  turned  to  the  question  which 
would  be  for  the  decision  of  the  court.  The  Act  of  Parliament  was  regu- 
larly worded.  It  declared  that  no  banker,  broker,  agent,  or  other  person 
liable  tinder  the  Act,  should  be  liable  to  conviction  by  any  evidence  what- 
ever, in  respect  of  any  act  done  by  him,  if  he  shall,  at  any  time  previously 
to  his  being  indicted,  have  disclosed  such  act  on  oath,  in  consequence  of 
any  compulsory  process  in  any  court  of  law  or  equity,  or  in  any  action  or 
honufide  process,  or  in  examination  or  deposition  before  any  court  or  com- 
missioner in  bankruptcy.  And  the  Act  gave  to  the  Court  of  Bankruptcy 
the  right  of  examining  on  oath.  But  the  inference  was  that  Parliament 
intended  that  the  Court  of  Bankruptcy  should  have  the  power  to  call  for 
such  disclosures,  and  not  that  a  person  who  was  guilty  of  an  act  which, 
upon  conviction,  made  him  liable  to  transportation  for.  fourteen  years, 
should  escape  the  consequences  of  that  act  by  going  to  a  commissioner  of 
bankruptcy,  and  tendering  a  statement.  After  calling  attention,  also,  to 
the  fact  that,  in  the  declaration  made  to  the  Court  of  Bankruptcy,  no 
reference  was  made  to  the  bonds  which  formed  the  subject  of  the  indict- 
ment, but  merely  to  the  bonds  deposited  with  Overend  and  Gurney,  and 
repeating  that  the  question  of  the  effect  of  the  disclosure  would  be  for  tho 
court  only  to  consider,  he  left  it  to  the  jury  to  pronounce  upon  the  guUt 
or  innocence  of  the  defendants. 

After  consulting  together  for  a  few  moments,  the  jury  expressed  a  wish 
to  retire ;  and  after  an  absence  of  half  an  hour,  returned  a  verdict  of  GTJiLir 
against  all  the  prisoners. 

Mr.  Baron  Aldeeson  to  the  jury — What  is  your  opinion  as  to  the 
other  point  ? 

The  Foreman — That  there  has  been  no  disclosure  within  the  meaning 
of  the  Act. 

Mr.  Baron  Axdersox — Ah,  you  think  not  ?  Do  you  think,  then,  it 
was  a  sham  ? 

The  Foreman — We  do. 

Mr.  Baron  Aldeeson  suggested,  that  as  the  judges  were  unanimous 
that  the  disclosure  under  the  bankruptcy  would  not  save  the  prisoners,  the 
verdict  had  better  be  entered  upon  the  first  and  third  counts,  imder  which 
the  question  would  not  arise. 

This  having  been  done, 

Mr.  Baron  Aldeeson  proceeded  to  pass  sentence.  He  said — The 
prisoners  at  the  bar  had  been  found  guilty  of  the  offence  of  disposing  of 


FACTS,  PAILUBES,   A.2fD   FHAUDS.  115 

sccarities  entrosted  to  them  as  bankers  by  their  customers  for  safe  keeping, 
and  for  their  use,  but  which  they  (the  prisoners)  had  appropriated,  under 
circumstances  of  temptation,  to  their  own.  A  greater  or  more  serious 
offenco  could  hardly  be  imagined  in  a  great  commercial  community  like 
tliis,  or  one  that  tended  more  to  shako  the  confidence  of  all  persons  in  such 
establishments  as  that  ■which  they  had  so  long,  and  for  some  time  so 
honourably,  conducted.  He  very  much  regretted  that  it  had  fallen  to  his 
lot  to  pass  sentence  upon  persons  in  their  position,  but  the  public  interest 
and  public  justice  required  it,  and  it  was  not  for  him  to  shrink  from  his 
duty,  however  painful  it  was  to  him.  Ho  could  have  wished  that  that  duty 
had  fallen  upon  some  one  else,  recollecting  as  he  did  that  he  had  more  than 
once  met,  at  least  one  of  the  prisoners,  under  far  different  circumstances, 
sitting  by  his  side  in  high  office,  instead  of  being  before  him  in  the  prisoners' 
dock.  All  the  prisoners  had  been  well  educated,  and  had  moved  in  a 
position  of  society.  The  punishment  which  was  about  to  fall  on  them 
therefore,  would  be  far  more  severe,  far  more  heavy,  and  much  more  keenly 
felt  than  it  would  probably  by  persons  in  a  lower  condition  of  life.  It 
would  also,  he  regretted  to  say,  afflict  those  who  were  connected  with  tliem, 
and  who  would  naturally  feel  their  present  position  with  great  severity. 
These,  however,  were  not  considerations  for  him  at  that  moment ;  all  he 
had  to  do  was  to  say  that  he  could  not  conceive  any  worse  case  that  could 
arise  under  the  statute  under  which  they  had  been  convicted,  and  that  being 
evident,  he  had  no  alternative  but  to  pass  upon  them  the  sentence  which  the 
Act  of  Parliament  provided  for  the  worst  class  of  olFences  arising  under  it, 
which  was  that  they  be  severally  transported  for  the  term  of  fourteen  years. 
The  prisoners  were  then  removed  in  custody,  and  the  Court  adjourned. 


THE  ESTATE  OF  MESSRS.  STRAHAN,  PAUL,  AND  BATES 
AS  ADMINISTERED  IN  BANKRUPTCY. 

The  following  is  the  report  prepared  by  Mr.  Turquand,  the  pubh'c 
accountant,  on  the  general  affairs  of  this  estate,  together  with  copies  of  the 
joint  and  separate  balance-sheets  : — 

"  13,  Old  Jewry  Chambers,  Dec.  10. 
"  To  the  Assignees  of  the  Estate  of  Messrs.  Strahan,  Paul,  and  Bates. 
"  Gentlemen, — I  beg  to  make  the  following  report  of  my  investiga- 
tion of  the  books  and  accounts  of  Messrs.  Strahan,  Paul,  and  Bates  : — 

"  Eepobt. — The  bank  of  Messrs.  Strahan  and  Co.  was  one  of  the  oldest 
on  record,  dating  its  origin  from  the  early  part  of  the  reign  of  Charles  II. 
At  the  time  of  the  bankruptcy i  the  firm  consisted  of  William  Strahan,  Sir 
John  Dean  Paul,  and  Robert  Makin  Bates.  Sir  John  Dean  Paul  (then 
Mr.  Paul)  becaii.e  a  nominal  partner  in  1823,  taking  no  share  of  the  profits 

L 


146  TACTS,  rAILTJEES,  AITD  rEATTDS. 

until  tlie  death  of  his  father,  the  late  Sir  John  Dean  Paul,  in  January,  1852. 
The  firm  was  composed  of  Eobert  Snow,  Sir  J.  D.  Paul,  and  J.  D.  Paul. 
WiUiam  Strahan  (who  had  changed  his  name  from  Snow  on  inheriting  a 
very  considerable  property  from  an  uncle  in  1831)  joined  the  above  firm, 
with  his  brother  Eobert  Snow,  in  1832.  Eobert  Snow,  sen.,  died  in  1835. 
Eobert  Snow,  the  younger,  retired  from  the  bank  in  1811,  and  in  January, 
1842,  Eobert  Makin  Bates,  who  had  for  many  years  been  a  confidential 
clerk  in  the  bank,  became  a  nominal  partner  at  a  salary  of  £800  per  annum, 
subsequently  raised  to  £1000  per  annum,  without  any  share  in  the  profits. 
It  is  not  necessary,  for  the  purpose  of  elucidating  the  present  position  of  the 
bank,  to  go  further  back  than  the  partnership  of  Eobert  Snow,  William 
Sandby,  and  John  Dean  Paul,  formed  in  1813.  On  the  death  of  Mr.  Saudby, 
in  1816,  the  partners  were  indebted  to  the  bank  in  a  sum  of  £29,000,  which 
was  apportioned  in  the  following  manner : — Eobert  Snow,  £16,681  2s.  9d.; 
Wm.  Sandby,  £8,989  2*.  Gc^. ;  John  Dean  Paul,  £3,329  14s.  9d.  Total, 
£29,000. 

"  The  debt  of  William  Sandby  was  paid  oif  by  his  executors  by  the  end 
of  the  year  1826.  At  that  period  the  debt  due  by  the  remaining  partners 
had  increased  to  £53,600,  which  was  apportioned  in  the  following  manner: 
—Eobert  Snow,  £36,319  10s.  9d. ;  the  late  Su-  J.  D.  Paul,  £17,280  9s.  3d. 
Total,  £53,600.  This  debt  was  represented  by  a  joint  note  of  the  two,  by 
an  arrangement  between  themselves,  and  acquiesced  in  by  succeeding  part- 
ners. The  amount  was  to  be  considered  as  a  debt  due  to  the  bank,  to  be 
gi'adually  liquidated  by  a  certain  portion  being  carried  every  year  to  profit 
and  loss.  By  this  means,  at  the  death  of  the  late  Sir  J.  D.  Paul,  the  amount 
had  been  reduced  to  £28,500,  and  at  the  date  of  the  bankruptcy  had  been 
further  reduced  to  the  sum  of  £23,500. 

"  The  balance-sheet  now  filed  commenced  on  the  31st  of  December,  1851, 
showing  a  deficiency  of  £71,990  7s.  2d. 

"Deducting  the  amount  then  standing  to  the  credit  of  William  Stra- 
han's  capital  account,  £10,330  Gs.  Id.,  less  the  amounts  to  the  debit  of  the 
present  Sir  J.D.  Paul,  £213  13s.  8d.,  and  E.  M.  Bates  (loan)  £3,669  4s.  4c?, 
(£3,882  18s.),  £6,447  8s.  Id.,  left  an  actual  deficiency  between  assets  and 
liabilities  of  £65,542  19s.  1^. 

"  This  deficiency  appears  to  have  been  composed  of  the  following  items, 
viz.': — Balance  due  on  joint  note,  £28,500;  debt  due  by  the  late  Sir  J.  D. 
Paul,  £35,477  12s.  Id.,  less  balance  of  subsequent  receipts  and  payments 
to  the  credit  of  his  account,  £10,084  15s.  5d. ;  total,  £25,392  16s.  8d. ; 
bad  and  doubtful  debts  not  written  off',  £2,446 ;  bad  and  doubtful  debts, 
Halford  and  Co,,  £15,705  12s,  8d. ;  estimated  loss  on  valuation  of  bank 
assets,  £4,369  Is.  6d. ;  total,  £76,413  10s.  10c?. 

"Deduct — Amount  standing  to  credit  of  balances  written  oif  as  un- 
claimed, £4,073  4s.  Id. ;  Halford  and  Co.,  alleged  sui-plus,  as  shown  by 


FACTS,  FAILURES,  AXD   FBATIDS.  147 

books,  £3 19  19*.  Id. ;  balance  to  credit  of  partners'  accounts,  £6,447  Ss.  Id. 
(£10,870  lis.  9rf.)     Total,  £G5,542  19*.  Id. 

"  It  should  be  remarked  that  there  is  one  item  included  in  the  assets 
at  its  full  amount,  the  actual  value  of  which  would  materially  affect  the 
above  position,  and  that  is  a  sum  appearing  to  the  debit  of  Lord  Slostjn 
of  £92,001  16s.  lOef.  Between  the  years  181S  and  1850,  large  advances 
had  been  made,  and  in  January,  1850,  a  lease  of  the  property  known  as 
the  Mostyn  Colliery  was  granted  by  Lord  Mostyn  to  the  baiJc,  to  secure  a 
sum  of  £67,541  14^?.  Bd.  then  due  by  him. 

"  The  colliery  required  very  considerable  outlay  to  bring  it  into  a  pro- 
ductive condition,  and  upwards  of  £45,000  was  so  expended  by  the  bank. 
With  this  expenditure,  and  arrears  of  interest,  the  amount  to  the  debit  of 
the  account  at  the  time  of  bankruptcy  was  £134,940  Vis.  Id.  The  col- 
liery had  thus  been  brought  into  a  productive  state,  yielding,  however,  only 
suiBcient  to  cover  expenses  and  to  pay  interest  on  a  sum  of  £45,000, 
which  had  been  borrowed  by  the  bank  on  the  security  of  the  lease,  to  meet 
the  necessary  outlay.  Taking  the  amount  thus  borrowed  as  an  indication 
of  the  value  of  the  assets,  the  deficiency  of  the  bank  would  be  increased 
to  about  £110,000.  At  this  date,  however,  William  Strahan  was  pos- 
sessed of  unencumbered  private  property  to  the  extent  of  upwards  of 
£100,000,  Sir  J.  D.  Paul  about  £30,000,  and  E.  M.  Bates  about  sufficient 
to  cover  his  debt  to  the  bank — say,  £3000.  Taking  into  consideration  the 
secxirity  thus  afforded  to  customers  by  the  value  of  the  private  property, 
it  might  be  inferred  the  bank  would,  with  care  and  prudence,  have  reco- 
vered its  position.  The  unfortunate  connection,  however,  with  Messrs, 
J.  H.  and  E.  F.  Qandell,  commencing  in  1852,  and  resulting  at  the  date  of 
the  bankruptcy  in  a  debt  to  the  bank  of  £269,382  3s.  5d.,  with  liabilities 
in  addition  on  their  own  account  to  the  extent  of  £103,870,  coupled  with 
the  already  heavy  withdrawal  of  capital  in  respect  of  Lord  Mostyn's  debt 
and  the  Mostyn  Colliery,  may  be  fairly  looked  upon  as  the  causDs  which 
brought  about  the  disastrous  failure  of  the  bank. 

"  Messrs.  Strahan  and  Co.  were  induced,  by  the  representations  made 
to  them  by  Messrs.  Qandell,  to  advance  from  time  to  time  large  sums  of 
money  for  the  purpose  of  enabling  them  to  carry  out  certain  contracts  for 
the  construction  of  railways  in  Franco  and  Italy,  and  for  the  drainage  of 
the  Lake  Capcstang,  situated  in  the  south  of  France.  The  profit  to  bo 
derived  by  Messrs.  Strahan  in  the  transactions  was  5  per  cent,  interest  on 
money  advanced,  ^  per  cent,  commission  on  all  payments  made  by  them, 
and  the  payment  of  a  debt  of  £1800,  considered  bad,  duo  by  J.  II.  Qan- 
dell to  the  bank  in  1850. 

"  The  debt  to  the  bank  (for  which  no  tangible  security  was  held)  soon 
ossumcd  such  gigantic  dimensions,  and  Messrs.  Qandell's  affairs  were  found 
to  be  in  that  condition,  that  Messrs.  Strahan  imagined  they  had  no  alter* 


148  FACTS,    TAILUEES,   AlfD  FllArDS. 

native  left  but  to  continue  their  advances  for  tlie  purpose  of  maintaining 
Messrs.  Gandells  in  a  position  to  carry  on  the  various  contracts,  the  com- 
pletion of  which  was  looked  to  as  the  source  whence  the  vast  sums  advanced 
were  to  be  recovered. 

"Tbe  time  arrived  when  the  resources  of  the  bank  were  no  longer  able 
to  meet  this  constant  drain  upon  it.  Acceptances  were  then  giveu,  and 
other  heavy  periodical  liabiHties  incurred,  for  the  purpose  of  providing  the 
required  funds.  These  last  acts  appear  to  have  led  to  the  most  distressing 
feature  of  this  case ;  almost  the  whole  property  of  the  bank  had  been 
pledged,  and  Mr.  Strahan's  private  estate  was  resorted  to  for  the  same  pur- 
pose :  the  large  sums  so  raised  had  disappeared,  and  there  was  no  alter- 
native but  the  payment  of  the  acceptances  and  other  liabilities  as  they  fell  due 
or  bankruptcy.  In  the  vain  hope  that  the  anticipated  funds  would  yet  be  forth- 
coming, in  time  to  avert  the  impending  ruin,  recourse  was  had  to  those  means 
of  raising  funds,  the  consequences  of  which  are  now  being  visited  on  the 
bankrupts.  The  nature  and  extent  of  the  securities  held  by  the  assignees  in 
respect  of  the  debt  due  by  Messrs.  Gaudellare  detailed  in  the  balance-sheet. 
"  The  present  deficiency  of  the  bank  is  as  follows  : — 

LiabiHties        ....    £652,593  15    0 
Estimated  assets        .  .  .       127,670  16    7 

Deficiency        .  .    £524,922  18     5 

"  It  will  be  seen  by  referring  to  the  items  composing  this  deficiencv  as 
set  forth  in  the  balance-sheet,  that  the  sums  involved  in  the  transactions 
with  Messrs.  Gandell  and  Co.  and  Lord  Mostyn  amount  to  upwards  of 
£483,000  of  the  whole  amouut.  Time  has  not  permitted  the  completion  of 
the  balance-sheets  of  the  separate  estates,  but  they  will  be  filed  as  expe- 
ditiously as  possible.  The  position  of  the  bankrupts'  personal  accounts 
-with  the  bank  at  the  time  of  its  failure  is,  however,  shown  on  the  face  of 
the  joint  balance-sheet  now  filed. 

"I  have  the  honour  to  be,  Gentlemen,  your  obedient  servant, 

"W.  Tfeqtjand." 

BALANCE-SnEET  OF  MESSES.   STEAnAJT,   PATTl,   AND   BATES. 

To  creditors  unsecured        .  .  .  £411,210  15    4 

To  creditors  of  Ilalford  and  Co.      .  .  26  800  16     4 

Creditors  for  securities  sold  .  .  £15,964    6     0 

Ditto  pledged  ....    94,911     7    8 

Ditto  belonging  to  customers  of  Halford 

and  Co.   .  .  .  .  .    12,802  17     0 


123,678  10    8 
Deduct  amounts  for  which  certain  of  the 

above  parties  are  debtors,  or  hold  security    13,221  12     4 


110,456  18    4 


Carried  forward       .  .  518,  iGS  10    0 


PACTS,  TAILTiaES,  AND  FRAUDS.  149 

Brought  forward  ,  ,  £548,4<58    10    0 

Creditors  holding  security  fully  covered  per 

contra £184,889  12  11 


Ditto  partly  corcrcd  .  .  .    12,935     5     0 

Deduct  estimated  value  of  securities  held  .    12,680    0    0 


255    5    0 


Creditors  for  advances  on  pledged  securities 
per  contra  .  .  .  .  100,109  17    4 

Creditors  who  issued  extents,  and  were  paid 
in  full,  deducted  from  assets,  per  contra  .     3,599    2    1 

Liabilities  on  account  of  Messrs.  Gandell  .  103,8/0    0    0 

Profit  net 31,304    1     9 

To  W.  Straban — Balance  to  his  credit  after 

deducting  amount  drawn  out  by  him  for 

private  expenditure  .  .  .  17,401  14     3 

Sir  J.  D.  Paul,  ditto  ...  772  12     3 

W.  Strahan — For  separate  property  held  by 

creditors  of  bank  .  .  .    70,457    0    0 

Amount  requii-ed  to  cover  their  claims       •  32,673    4    0 

£734,745    7    3 


Ceeditoe. 
By  Debtors — Strahan  and  Co.,  considered  good       .  .  £76,536  14    1 

Halford  and  Co.,  ditto  22,484    2    8 

Doubtful  and  bad.  .  .  £28,298  18     3 

Do.,  Gandell  and  Co.      £289,382    3     5 

Less  purchase-money  of 

Capestang  Lake  .    20,000     0     0 


269,382    3     5 


Do.,  Lord  Mostyn  .  .  134,9 10  17 

Deduct     proportion     of 

debt  mortgaged  .    41,967     3    4  89,973  13    9 

Property  unincumbered,  viz.  —[Shares       .  £4,333  15  0 

Life  pohciea         ....  .12,315  13  0 

Freehold  and  leasehold   .  ,  .      2,500    0  0 

Exchequer  bills  .  .  .        300    0  0 

Capestang  Lake  not  carried  out — the  expen- 
rliture  required  to  complete  the  drainage 
and  other  incidental  circumstances  ren- 
dering the  value  of  this  property  uncertain    20,000    0    0 

By  cash  in  hand,  lltb  of  Juno       • 
By  bills  receivable  .  . 

By  cash  at  the  Bank  of  England  • 


Deduct  creditors  paid  in  full  per  contra 


19,449    8    0 


1,767 

2 

6 

9,949 

3 

6 

83 

8 

0 

11,799  13  11 

3,599 

2 

1 

8,200  11  10 


Ouried  forivard       •  •  •  .  126,670  16    7 


150  TACTS,    PAILrEES,   A>'D   PEArDS, 

Brouglit  forward  .  .  .  £12G,670  16     7 

By  debtors,    the    securities    representing 

wliich  are  held  by  creditors         .  .  £G9,343  13  10 

By  property  of  bank  held  by  creditors       .    96,996  16     0 

Bo.    of    William    Strahan, 

held  by  joint  creditors      .  V0,457     0    0 

Amount  required  to  cover  their  claims    .    32,673    4    0 

199,013  13  10 
Deduct  amount  held  by  creditors  partly 

covered  ....    12,680    0    0 


leaving  do.  held  by  do.  fully  do.  .  186,333  13  10 

Beduct   amount  of  claims  of  creditors 

fully  covered      .  .  .  184,889  12  11 

Balance  available  for  estate        .  .       1,444    0  11 

Considered  as  a  good  asset  in  respect  of 

one  security  to  the  extent  of    .             .             .             .        1,000    0    0 
The  residue  is  not  carried  out,  being  subject  to  deduc- 
tion for  interest  accruing  due  on  creditors'  claims        . 

Total  amount  of  assets  considered  good  .    127,670  16     7 

By  securities    pledged    belonging    to   cus- 
tomers of  the  bank  .  .  .  94,911    7    8 
Bitto  Halford  and  Co.        .            .  .  12,802  17    0 


£100,109  17 

107,714 
4 

4 

8 

2,819  12 

0 
—  97,290 

5 

4 

Beduct  amount  so  bor- 
rowed 

Lessvaluc  of  Exchequer- 
bills  belonging  to  bank 
included        .  . 


£10,423  19     4 
This  balance  is  not  carried  out  as  an  asset,  being  subject 
to  the  question  as  to  the  right  of  tlie  assignees  and  of 
the  parties  to  whom  the  securities  belonged. 
By  deficiency,  December  31,  1851  ....      71,990     7     2 
By  amounts  not  carried  out  above,  viz.:  — 

Doubtful  and  bad  debts  .....  28.298  18  3 
GandeU  and  Co.'s  debts  .....  269,382  3  5 
Lord  Mostyn's  balance  .....  89,973  13  9 
Capestang  Lake .  .  .  .  20,000     0     0 

Surplus  value  of  property  held  by  cre- 
ditors as  security        .  .  .     £1,444    0  11 
Considered  a  good  asset  only  for            .        1,000    0    0 

444    0  11 

Surplus  value  of  customers'  securities  pledged     .  .     10,423  19    4 

By  R.  M.  Bates'  salary        .....       5,750     0     0 
Balance  to  his  debit         .....        4,381     7  10 
Sir  J.  D.  Paul  (deceased),  proportion  of  profit  credited 

him  in  1852,  written  back  .  '.  •  .        4,560     0     0 

Liabilities  per  contra  .....    103,870     0     0 

£734,745    7    3 


rACT8,  FAILTJnES,   AND   FBATTDS. 


151 


8EPAEATE   ESTATES   OP  JIESSBS.   STEAHAN,   PATTI.,   AKD   BATES. 

The  separate  Estate  q/"  William  STRAnAN,/rom  January  1, 1852, 
to  June  11,  1855. 

Dr. 
To  Creditors  tinsecared       .  .  •  £659    3  10 

Creditors  holding  security       .  .  2,760    0    0 

Liabilities  on  account  of  bank  .  13 1,008  11     8 

Liabilities  as  co-trustee  with  Sir  J.  D.  Paul    £  ,     17,231  10    7 

Ineomo  ......      15,458  13     4 

Share  of  proCts  of  bank  passed  to  my 

credit  in  1852  .  .  .  £5,700    0    0 

Ditto  in  1853  ....      7,700    0    0 
Ditto  in  1854  ....      7,000    0    0 


Surplus  assets  on  the  1st  of  January,  1852 


-     20,400    0    0 
.    128,048    2    0 

£318,566     1     5 


Cr. 
By  debtors  (good)  ..... 

Ditto  (doubtful)  .  .  .  .  i 

By  Property  unencumbered : — 

Sundries  ....;. 

Shares  ...... 

Reversionary  interest  .... 

By  property  held  as  security  by  private  creditors  , 

By  property,  security  to  creditors  of  bank 
By  expenses,  including  improvements  at  Ashurst,  and  ex- 
penditure on  farms : — 

Expenditure    .  .  .  £11,056    8    9 

Improvements,  &c.       ...     8,551  11    7 


By  annuity  paid  E..  Snow   . 

By  losses     . 

By  Strahan  and  Co. : — 

As  per  joint  balance-sheet 
Ada  share  of  profits    . 

By  liabilitiei  per  contra     • 


.£17,401  14  3 
.  20,400  0  0 


£1,471  6  0 
774  16  10 

12,059  16  7 

4,376  10  0 

400  0  0 

2,760  0  0 


23,508  0  4 

1,753  17  1 

11,962  18  1 


37,801  14  3 
.  151,240  2  3 

£248,109  1  5 


SEFABATE  ESTATE  BAIAITOE-SHSET  OP  SIE  JOnK  SEAN  TAUL,   BAET. 


Dr. 
To  creditors  unsecured 

Creditors  holding  security   fully  co- 
vered 
Creditors  holding  security  partly  co- 


Tcred 


Less  value  of  security 


Carried  forward 


.  £23,402  11    6 


£14,500    0    0 

.    15,000    0    0 
1,188    9    0 


13,811  11    0 
37,214    2    6- 


152 


TACTS,   FAILUEES,    A^*D    fEATTDS. 


Brought  forward 
Liabilities  on  account  of  bank  .  . 

Liabilities  as  trustee,  &c.  .... 

Income  ...... 

Share  of  profits  of  bank  passed  to  my 

credit  in  1853      .  .  .   £3,300    0    0 

Ditto  in  1854  .  .  .      3,000    0    0 

To  surplus  of  assets  on  the  1st  of  January,  1852    . 


£37,214  2  6 

134,008  11  8 

20,SS0  1  1 

3,546  9  4 


6,300     0     0 
14,757  14     0 


0 
0 

£216,706  18    7 

Cr. 
By  debtors  (good)  .            .            •            .            • 

Debtors  (doubtful)      .... 
Property           ..... 
Property  held  as  security  by  creditors 

fully  covered         .             .             .£20,400 
Deduct  amount  of  their  claims       .            .    14,500 

.     £2,241     4    0 

10    0    0 

.       9,306  19    0 

0 
0 

By  expenses             ..... 
Allowance  to  my  son  and  other  members  < 

family,  etc.            .... 
Losses              ..... 
Strahan  and  Co.,  as  per  joint  balance- 
sheet         ....      £772 
Tor  share  of  profit              .            .            .     6,300 

.      17,175  11     9 
3f  my 

.      11,726    2     9 
8,395  16    1 

12    3 
0    0 

By  liabilities  per  contra      •             ?             .            . 

.    154,888  12    9 

vIN 

£216,706  18    7 

THE   SEPAEATE   ESTATE   OE  EOBEBT  JIAI 

DATES. 

Dr. 
To  creditors             ..... 

Strahan  and  Co.           .... 
Income             ..... 
Surplus  of  assets  oyer  liabilities,  January  1, 185 
Liabilities  on  account  of  bank 
Ditto,  as  co-trustee  with  Sir  J.  D.  Paul           . 

2 

£85    3    7 

4,381     7  10 

4,405     2  10 

729  10    8 

.   134,008  11    8 

4,336  12     1 

£147,946     8     8 

Cr. 
By  property            ..... 
Expenses         ..... 
Losses              ..... 
Interest  to  Strahan  and  Co.     . 
Liabilities  per  contra  .... 

.     £1,903     3     7 

4,456  11     6 

2,793     3     2 

448     6    8 

.    138,345     3     9 

£147,946     8     8 

7ACT8,   FAILURES,   AND   FBAUBS.  153 


BEPOBT  OK  SEPABATE  BALAKCE-SHEET8. 

"  The  separate  balance-slieets  commence  on  the  Ist  of  January,  1852. 
In  the  report  made  on  the  11th  of  December  last,  upon  the  joint  balance- 
sheet,  the  surplus  private  property  of  tlie  partners  was  estimated  to  have 
been  as  follows,  on  the  Ist  of  January,  1852,  viz. : — 

W.  Strahan      ;.....     £100,000 

Sir  J.  D.  Paul  .....         30,000 

B.  M.  Bates     ......  Nil. 

"On  making  up  the  balance-sheets,  the  ascertained  amounts  are  as 

follows  : — 

W.  Strahan     .....      £128,048    2    0 
Sir  J.  D.  Paul  ....  14,757  14    2 

E.  M.  Bates    .  .  .  •  .  72    1    8 

At  the  date  of  the  bankruptcy,  the  creditors  of  W.  Stra- 
han amounted  to  ....  .     £3,419     3  10 

The  assets  amounted  to       .  .  .  .  .     92,299    9    5 

Of  which  £70,457  are  held  as  security  by  bank  creditors. 

The  creditors  of  Sir  J.  D.  Paul,  secured  as  well  as  unse- 
cured, amount«d  to      .  .  .  .  .  £52,902  11    6 

The  assets,  including  property  held  as  security,  to  .     31,958    3    0 

The  creditors  of  R.  II.  Bates,  including  debt  due  to  the 

bank,  amounted  to       .  .  .  .  .     £4,4G6    0    5 

The  assets  amounted  to       .  .  .  .  .       1,903    3    7 

"It  will  be  seen,  on  reference  to  the  balance-sheets,  that  liabilities 
arising  out  of  bank  transactions  to  the  amount  of  upwards  of  £131,000, 
have  ranked  against  the  assets  of  the  separate  estates,  independently  of 
sundry  liabilities  in  respect  of  trust  funds.  During  the  period  embraced 
by  the  balance-sheets,  the  amounts  paid  into  the  bank  by  William  Strahan 
and  ^ir  J.  D.  Paul  exceed  the  sums  drawn  out  by  them.  In  the  case  of 
William  Strahan  such  amount  was  supplied  from  his  private  estate ;  in  the 
case  of  Sir  J.  D.  Paul,  partly  from  the  sale  of  his  private  property,  and 
partly  from  moneys  in  respect  of  whicli  parties  are  now  creditors  on  his 
separate  estate."  "Wii.  Tubquand." 


154  TACTS,  FAILUEES,   XSD  rEAITDS. 


CHAPTEE  V. 

JOSEPH   TVTXDLE    COLE   AITD    THE   DOCK-WAEEA>^T   PEATJDS. 

The  Origin  of  the  Frauds— The  Antecedents  of  Cole  and  his  Associates  in 
Business — His  Successful  Operations  and  Extension  of  his  Engage- 
ments— Connection  with  Davidson  and  Gordon — Failure  of  the  re- 
spectiTC  Einns — The  Discovery  of  the  Transactions  with  Messrs.  Over- 
end,  Gurney,  and  Co.— The  Position  of  Mr.  David  Barclay  Chapman — 
The  Bankruptcy  of  Joseph  Windle  Cole  and  of  Davidson  and  Gordon 
— The  Apprehension  of  the  Eormer  and  the  Flight  of  the  Latter — The 
Examination  respecting  the  Issue  of  Spurious  Warrants — The  Disap- 
pearance of  Maltby,  the  supposed  Proprietor  of  Hagen's  Wharf — Trial 
and  Conviction  of  Cole— Death  of  Maltby — Subsequent  Arrest  of 
Davidson  and  Gordon — Their  Trial  and  Imprisonment. 

Of  the  various  incentives  that  exist  to  the  investigation  of 
fraud,  the  strongest,  perhaps,  lies  in  the  hope  of  thus  obtaining 
judicious  suggestions  for  the  improvement  of  existing  regu- 
lations so  as  to  exclude,  if  possible,  the  repetition  of  the 
illegal  or  prejudicial  operations  thus  brought  to  light.  To 
this  end,  however,  increased  individual  vigilance  will  be  found 
quite  as  essential  as  any  alteration  of  forms,  or  any  checks  or 
modes  of  dealing.  Eraud  that  has  attached  itself  to  any  one 
set  of  transactions,  after  being  repelled  in  one  form,  not  un- 
frequently  reappears  in  another.  The  complex  character  of 
recent  impositions  that  have  been  practised  in  taking  advan- 
tage of  those  agencies  by  which  exchanges  are  effected,  and 
business  conducted  with  celerity  and  despatch,  points  to  the 
foUy  of  idly  relying  on  even  the  most  perfect  system  of  me- 
chanical checks,  for  in  the  very  provisions  which  experience 
has  furnished  for  securing  straightforward  transactions,  humau 
ingenuity  has  found  materials  for  fresh  occasions  to  deceive. 


FACTS,   TAILUEES,    AITD   rUAUDS.  155 

Even  that  spirit  of  general  confidence  which  results  from  the 
long  observance  of  good  faith  in  any  given  line  of  business 
becomes  in  its  turn  a  dangerous  lure  to  the  unprincipled,  and 
is  sought  to  be  made  available  for  their  purposes.  Expe- 
rience goes  to  show  the  necessity  of  exercising  a  vigilance 
quite  independently  of  any  rules  that  may  be  formed  from  ob- 
servations on  human  character ;  that  the  highest  forms  of  com- 
bination which  financial  science  has  provided  may  be  applied 
to  criminal  purposes  quite  as  readily  as  to  any  other,  flourishing 
for  years,  and  eluding  aU  detection,  except  by  those  who  have 
traced  to  their  source  the  "irregularities"  by  which  these 
carefully-concerted  schemes  usually  manifest  themselves — 
schemes  so  combined  and  so  applied  that  any  discovery  short 
of  this,  any  control  or  separation  of  the  partial  instruments 
and  subordinate  agents,  can  contribute  little  or  nothing  to 
their  repression.     Thus — 

"  Many  things  having  full  reference 
To  one  consent  may  work  contrariously, 
As  many  arrows  loosed  several  ways 
Come  to  one  mark,  as  many  ways  meet  in  a  town, 
As  many  fresh  streams  meet  in  one  salt  sea, 
As  many  lines  close  in  a  dial's  centre." 

There  can  be  no  question  that,  when  fraudulent  operations 
of  this  complicated  character  are  brought  to  light,  any  indis- 
cretion or  lukewarmness  in  properly  dealing  with  them,  whether 
resulting  from  the  solicitation  of  the  criminal  parties,  or  from 
the  prospect  of  individual  interest  arising  from  what  is  vir- 
tually an  enforced  partnership,  must  result  in  incalculable 
mischief.  With  the  more  competent  view,  which  is  gradually 
expanding,  of  the  principles  which  enter  into  the  right  conduct  of 
business,  it  is  to  be  hoped  that  fewer  inducements  will  hereafter 
be  held  out  to  those  accustomed  to  look  to  men  of  position 
and  character  for  support  in  their  criminal  irregularities.  The 
application  of  these  observations  to  the  case  about  to  be  intro- 
duced will  be  sufficiently  apparent. 


m 


156  FACTS,   TAILTJEES,   AST)   TnWDS. 

The  year  1850  marks  in  the  commercial  and  trading  annals 
of  London,  the  commencement  of  a  fraud  of  the  most  extra- 
ordinary character,  the  effects  of  which  were  far  too  extensive 
to  permit  the  supposition  that  it  depended  on  anything  else 
than  a  defective  system  in  that  branch  of  business  to  which  it 
referred,  though  perhaps  incautiously  characterized  at  a  subse- 
quent time,  on  the  judicial  bench,  as  one  of  the  most  dangerous, 
as  well  as  one  of  the  most  criminal,  that  could  be  perpetrated 
in  any  community.  This  scheme  bore  all  the  marks  of  careful 
preparation,  so  well  did  it  conform  to  present  circumstances. 
Aided  by  large  mercantile  experience,  the  plan  through  which  it 
operated  not  only  long  defied  discovery,  but  proved  itself  well 
able  to  withstand,  under  the  defective  arrangements  which 
generally  existed,  well  calculated  to  surmount  those  disturbing 
influences,  which  never  fail  to  present  themselves  when  fictitious 
credit  comes  largely  to  perform  the  office  of  capital.  To 
obtain  a  tolerably  clear  view  of  this  transaction  for  creating 
additional  resources,  without  any  corresponding  increase  of 
personal  ability,  or  any  new  means  and  channels  of  redeeming 
credit,  some  preliminary  explanation,  partly  of  a  technical  and 
partly  of  a  personal  character,  will  be  necessar}-. 

This  daring  operation  consisted  in  imposing  on  numerous 
parties,  willing  to  advance  money  on  approved  securities,  dock- 
warrants,  which  gave  no  control  to  the  holder  over  the  goods 
they  represented,  while  yet  they  conformed  so  nearly  to  every 
requirement  of  custom  and  usage,  as  to  render  it  a  marvel 
in  the  end,  even  to  those  parties  who  found  themselves  power- 
less to  enforce  the  anticipated  delivery,  how  it  happened 
they  were  without  effect.  The  guarantees  by  which  the  genu- 
ine character  of  dock-warrants  is  guarded,  were  deemed  so 
sufficient,  that  they  could  not  be  broken  in  upon  short  of 
forgery ;  and  that  if  any  advantage  coiild  be  taken  of  them 
other  than  that  arising  from  the  laxity  of  dealers,  or  the  remiss- 
ness of  holders,  no  one  of  position  and  character  would  deal 


FACTS,   FAILURES,   AND  FEATTDS.  157 

fraudulently  with  them ;  while  it  was  presumed  that  from  the 
simplicity  of  the  document,  and  the  means  of  testing  it,  success 
was  precarious,  and  at  best  but  temporary.  The  scheme  was  in- 
volved in  such  mystery,  that  when  suspicion  of  fraud  had  been 
excited,  for  a  length  of  time  all  the  available  evidence  that  could 
be  brought  to  bear  on  transactions  relating  to  it,  fell  short  of 
the  discovery  of  its  precise  characteristic,  and  failed  to  disclose 
the  extent  of  its  development. 

Joseph  "Windle  Cole,  the  supposed  great  originator  of  the 
fraud  about  to  be  described,  comes  before  the  public  in  the 
year  1848,  as  a  general  merchant,  setting  up  with  the  style 
and  title  of  Cole  Brothers,  though  without  a  partner,  as  an 
East  India  merchant,  under  the  protection  of  a  certificate  of 
bankruptcy.  The  firm  of  Johnson,  Cole,  and  Co.,  of  which  he 
had  been  a  member,  had  failed  in  November  of  the  previous 
year,  with  a  doubtful  reputation,  leaving  but  indifferent  assets. 
Cole  established  his  office  in  Birchin  Lane,  took  in  two  of  his 
brothers  as  clerks,  and  commenced,  by  aid  of  loans  he  had  re- 
ceived, or  through  other  temporary  resources,  with  making 
consignments  to  order  and  shipping  on  his  own  account.* 

Two  considerations  affected  him,  the  limited  amount  of  his 
means,  the  degree  to  which  he  thought  it  important  to  be  able 
to  avail  himself  of  increasing  and  obvious  advantages.  He  had 
apparently  set  his  mind  on  securing  the  virtual  monopoly  of  a 
branch  of  the  trade  in  metals,  and  so  was  indisposed  to  wait 
for  the  remote  results  of  enterprises  adapted  to  the  restricted 
scale  of  his  then  present  resources.  When  connected  with  the 
house  of  Forbes,  Forbes,  and  Co.,  as  a  clerk,  the  opportunity 
had  been  afforded  him  of  establishing  a  large  connection  in  this 
country  and  in  India.  Favoured  by  this  circumstance,  ho 
appeared  inclined  to  risk  the  whole  beneficial  consequences 

•  Two  huge  pamplilcts,  by  Mr.  Seton  Laing,  the  assignee  to  Cole's 
estate,  fully  expose  these  frauds,  but  in  a  very  extended  form.  They,  how- 
ever, contain  much  interesting  information,  and  clearly  trace  tho  history  of 
the  whole  of  these  nefarious  transactions. 


158  TACTS,   FAILUEES,   A^TD  rEAITDS; 

which  might  have  been  derived  from  that  position  through  the 
folly  of  enlarging  his  operations  to  the  widest  possible  extent. 
He  had  great  business  capacity,  but  this  lay  chiefly  in  ability  to 
multiply  transactions,  to  increase  the  sphere  of  those  transac 
tions,  and  to  control  them  up  to  a  given  point,  as  well  as  to 
persuade  others  to  enter  into  his  views,  and  to  co-operate 
with  him  in  his  plans;  but  the  efforts  he  put  forth  brought 
with  them  no  proportionate  results.  In  his  first  efforts  to  carry 
out  busiuess  he  had  been  unsuccessful,  having  been  brought 
down  in  the  panic  of  1847-48  ;  and  now,  on  entering  the  scene 
of  a  fresh  career,  he  was  determined  to  employ  his  talent 
on  a  much  larger  scale.  Among  the  houses  which  also 
failed  in  that  calamitous  period  was  one,  trading  as  produce 
brokers,  under  the  title  of  Messrs.  Sargant,  Gordon,  and  Co., 
containing  three  partners,  viz.,  Messrs.  Sargant,  Gordon,  and 
Davidson,  but  when  the  estate  was  wound  up  they  separated, 
Mr.  Sargant  entering  another  branch  of  business,  and  Messrs. 
Gordon  and  Davidson  forming  a  new  firm  in  the  metal 
trade,  reversing  the  order  of  names,  and  calling  it  Davidson  and 
Gordon.  They  were  intimate  with  Joseph  Windle  Cole,  and 
their  business  connections  became  eventually  extensive. 

In  seeking  for  some  artificial  prop,  some  mode  of  replenish- 
ing his  languishing  means,  he  evidently  resolved  upon  a  new 
and  hitherto  untried  experiment.  His  personal  knowledge 
directed  him  to  the  fact,  that  the  large  discoimt  houses  who, 
accustomed  to  make  advances  on  warrants,  seldom  examined  the 
documents  tendered,  further  than  to  see  that  they  were  properly 
signed  and  satisfactorily  endorsed,  and  that  a  fair  margin  was 
left  for  profit  over  and  above  the  advance  required,  the  warrants 
being  scarcely  ever  noticed  again,  so  that  the  loans  advanced 
on  them  were  punctually  met,  or  duly  renewed.  The  problem 
to  be  solved,  and  to  the  solution  of  which  Cole  now  applied 
himself,  was  this :  Granted,  that  the  guarantees  tendered  by  me 
to  money-lenders  are  wholly  imaginary,  how  shall  I  arrange  it 


PA0T3,   FAILUEES,   Am)  PBAUDS.  159 

that  without  risk  to  myself,  and  in  that  case  certainly  without 
injury  to  the  other  party,  seeing  that  interest  will  be  duly  paid, 
and  the  money  so  obtained  be  eventually  refunded  from  the 
profits  of  successful  enterprises,  I  can  make  a  fictitious  batch 
of  warrants  answer  the  purposes  of  a  genuine  series. 

That  certain  favouring  circumstances,  as  they  successively 
presented  themselves,  must  have  suggested  to  Cole  portions  of 
the  completed  scheme,  or  at  least  have  given  to  it  precision 
and  distinctness,  as  it  slowly  arose  in  his  own  mind,  and  was 
afterwards  carried  into  execution,  there  can  be  no  question ; 
but  these  circumstances  must  have  been  preceded  by  the  gene- 
ral conception  of  duplicate  warrants,  of  cargoes  turned  twice 
over,  of  two  deliveries  of  the  same  goods,  of  two  distinct  war- 
rants signed  by  separate  wharfingers,  acting  independently  of 
each  other,  of  one  of  these  warrants  being  made  deliverable 
to  the  importer  of  the  goods  represented  by  it,  the  other  to 
himself  as  the  merchant-purchaser,  of  entering  the  goods  in  the 
record  kept  by  the  dock  company  on  his  own  account,  it  being 
immaterial  to  the  company,  but  very  material  to  himself,  as  to 
whether  he  figured  as  purchaser  or  importer ;  in  a  word,  aU 
those  leading  measures  necessary  for  the  creation  of  an  artificial 
guarantee  that  should  avoid  the  risk  of  an  opposite  result. 
The  obliteration  of  all  obvious  distinction  between  the  true 
and  the  fidse  warrants  was,  from  the  first,  an  essential  condi- 
tion which  pervaded  all  the  arrangements,  and  characterized 
the  whole  history  of  the  fraud.  To  bring  a  wharf  under  his 
control,  and  to  secure  a  wharfinger  in  his  interest,  was  the  first 
step ;  and  to  purchase  goods  "  to  arrive,"  and  to  induce  im- 
porters to  enter  goods  of  the  character  he  desired  for  the  wa]> 
rants,  to  the  largest  possible  amount,  at  his  own  wharf,  was  the 
second  step.  The  goods,  as  soon  as  lightered  and  weighed  by 
his  own  wharfinger,  were  to  be  handed  for  storage  to  the 
nearest  warehouse,  and  not  a  receipt,  but  a  warrant  obtained 
for  them,  on  the  presumption,  of  course,  that  no  other  warrant 


160  TACTS,  PAILUEES,  A>'D  FEAUDS. 

had  been  issued.  The  warrant  signed  by  Cole's  own  wharf- 
inger, and  made  deliverable  to  him,  would,  on  endorsement, 
pass  current  in  the  market,  whilst  that  supplied  from  the  ware- 
house, on  being  endorsed  by  the  importers,  could  be  used  for 
obtaining  advances. 

Intent  on  the  execution  of  his  scheme.  Cole  soon  obtained 
information  that  a  small  wharf,  by  the  name  of  Hagen's  Suf- 
ferance Wharf,  situate  on  the  Thames,  in  St.  Saviour's  Dock, 
Bermondsey,  was  to  let.  In  all  respects  it  appeared  suitable 
to  his  purposes.  The  frontage  vras  narrow,  and  there  abutted 
on  it  enormous  warehouses,  which  would  strike  any  casual 
observer  as  being  in  the  possession  of  the  lessee  of  the  wharf, 
and  so  enforce  the  authority  of  the  acting  wharfinger  of  the 
latter.  This  effect  was  the  more  striking  that  these  ware- 
houses not  only  adjoined,  but  opened  on  the  wharf,  which 
allowed  free  ingress  and  egress  to  the  occupants.  At  the 
further  end  of  tlie  wharf,  opening  on  Mill  Street,  was  a  shed, 
and  opposite  to  it,  divided  by  the  road,  a  small  cottage,  which 
was  part  of  the  property.  The  wharf  was  found  to  be  the 
property  of  Mrs.  Mary  Hagen,  by  whom  also  the  adjoining 
warehouses  were  partly  held,  a  discovery  which  promised  ma- 
terially to  aid  the  pretensions  Cole  was  about  to  set  up. 
Anxious  as  was  Cole  to  secure  the  premises,  he  avoided,  in  the 
exercise  of  his  usual  caution,  aU  appearance  of  being  the  party 
seeking  possession.  Accordingly,  his  brother,  James  Edward 
Cole,  and  a  person  of  the  name  of  George  Harris  De  Eussett, 
"a  gentleman  at  ease,"  who  will  figure  again  in  this  narration 
obtained  the  premises  on  a  lease  for  fourteen  years,  at  an 
annual  rental  of  £130. 

The  ostensible  and  "  coming  man"  was  not  far  ofi".  Cole 
had  already  provided  for  a  wharfinger  in  the  person  of  "William 
Maltby,  formerly  a  fellow-clerk  in  the  house  of  Forbes,  Forbes, 
and  Co.,  and  who  had  recently  applied  to  him  for  a  situation. 
Maltby,  on  whom  so   much  depended,  had   proved  himself. 


FACTS,   FAILUBES,   A>'D    FUAUDS.  IGl 

during    tlie    temporary    employment  Colo  had  lately    given 
to  him,  on  his  application,  to  bo  disposed  to  submit  implicitly 
to  whatever  he  deemed  the  inevitable  necessities  of  a  position 
which  wovdd  procure  for  him  subsistence.     Jso  time  was  to 
be  lost  in  putting  such  a  man  in  possession.     This  was  done, 
but  without  obtaining  for  him  a  license.     Cole,  who  saw  no 
reason  to  make  Maltby  the  partner  of  his  plans,  merely  vouch- 
safed to  inform  him  that  he  had  taken  the  wharf  in  order  to 
economize    charges  on  a  largely  increasing   trade  in  metals. 
Sufficient  light  would,  in  due  time,  be  let  into  the  mind  of 
Maltby,  who  as  yet  had  not  caught  sight  even  of  the  scintil- 
lations of  those  dazzling  visions  that  shone  on  the  career  of 
Cole.     "With  a  simplicity  that  approached  stolidity,  Maltby 
formed  such  an  idea  of  the  omni  potency  of  Cole,  that  he  was 
ready  to  do  anything  commanded  by  his  employer,  looking  to 
him  "  to  put  all  right,"  and  uninquiring  as  to  the  results  of  a 
course  full  of  peril  to  himself,  as  subjecting  him  not  only  to 
the  charge  of  signing  warrants  for  goods  for  which  he  had 
nothing  to  show,  but  of  entering  into  a  conspiracy  to  defraud. 
Maltby,  as  Cole  had  done,  created  himself  into  a  firm,  to  be 
styled  "  Maltby  and  Co.,"  and  then  called  on  Messrs.  Groves 
and  Sons,  the  lessees  of  the  adjoining  warehouses,  representing, 
as  the  agent  of  Cole  Brothers,  that  the  wharf  which  they  had 
taken  was  insufficient  for  the  accommodation  of  the  goods 
lightered  there,  and  stating  their  willingness  to  enter  into  an 
arrangement  by  which,  after  he  had  weighed  the  goods,  they 
should  store  the  same  away,  he  receiving  the  landing  charges, 
and  they  the  charges  for  rent.     Nothing  could  seem  more 
equitable  than  this  proposal ;  it  was  quite  in  the  usual  course 
of  business,  and  Messrs.  Groves  and  Sons  had  accordingly  no 
hesitation  in  giving  their  compliance.     Maltby  was  delighted 
for  the  sake  of  his  employers ;  but  he  had  a  parting  request  to 
make,  a  slight  one,  to  which  Messrs.  Groves  and  Sous,  after 
the  spirit  of  accommodation  they  had  shown,  would  doubtless 


1C2  FACTS,    FAILUEE3,    AXD    rKAVDS. 

accede  to.  Tliis  was  that  tlicy  would  allow  the  goods  tlins 
stored  to  be  seen  and  examined  from  time  to  time,  as  niigM  be 
required,  bv  the  customers  of  Cole  Brothers.  "  Oh,  surely," 
Nothing  now  was  necessary  but  to  carry  the  scheme  into  fall 
operafcioa.     To  jMaltby  came  the  admonishment — 

"Thou  art  instructed! 
With  caution  answer,  wilt  thou  swear  ?" 

rJaltby  drew  his  warrants,  which  were  chiefly  for  spelter, 
tin,  steel,  copper,  iron,  and  lead,  deliverable  to  the  importer, 
whilst  those  of  Groves  and  Sons  were  made  deliverable  to  the 
holder  from  whom  they  were  received,  and,  accordingly,  ran  in 
the  name  of  Cole  Brothers.  The  warrants  received  from 
Groves  and  Sons  were  taken  by  himself,  or  his  metal  brokers, 
Davidson  and  Gordon,  immediately  into  the  market ;  and 
whether  prices  were  rising  or  falling,  they  were  sold  for  what 
they  would  fetch,  despatch  in  this  part  of  the  scheme  being 
indispensable.  This  was  done  without  any  communication 
being  had  with  the  importers,  contrary  to  the  usages  of  trade. 
Some  days  after,  wheji  the  only  warrants  entitled  to  be  con- 
sidered valid  had  been  disposed  of,  he  carried  those  signed 
•'  Maltby  and  Co.,  wharfingers,"  to  the  importers  of  the  goods 
they  represented,  to  be  endorsed,  to  be  applied  in  the  only  way 
in  which  such  warrants  could  be  of  any  service. 

Cole's  further  proceedings  were  taken  with  a  precision  and 
effect  indicating  how  well  matured  were  his  plans.  This 
scheme,  capable  of  such  mischievous  power,  admitted  of  the 
most  exact  control,  and  Cole  kept  a  strong  force  of  clerks, 
whose  business  it  was  to  check  the  double  lists  of  warrants, 
so  that  no  duplicates  of  similar  goods  should  fall  into  the  same 
liands,  to  intermix  the  warrants,  genuine  and  fictitious,  and  to 
advise  him  of  loans  falling  due.  Aided  by  the  memoraudas 
which  were  thus  made — for  few  regular  books  were  kept — and 
assisted  by  the  experience  and  ability  of  Messrs.  Davidson  and 


FACTS,  FAILUHES,  ASH)  mAUDS.  1C3 

Gordon,  Lis  brokers,  as  well  as  his  own  acuteness  and  sagacity, 
he  was  enabled  to  maintain  his  position,  though  meeting  at 
every  turn  with   peculiar  emergencies. 

To  afford  a  yet  wider  basis  of  operations,  it  was  determined 
to  fabricate  a  large  number  of  accommodation  bills ;  and,  for 
the  purpose  of  acceptance,  the  firm  of  Paris  and  Co.  was 
created,  and  an  account  opened  for  it  at  Messrs.  Masterman 
and  Co.'s.  This  was  in  the  year  1851.  The  firm  consisted  of 
Cole,  Davidson,  Gordon,  and  afterwards  of  George  Harris  De 
Hussett.  Eichai'd  Paris,  a  mechanical  engineer,  was  given  two 
guineas  a-week  by  De  Eussett  for  tlie  use  of  his  name,  and 
Maltby  was  the  person  who  accepted  most  of  the  bills  in  the 
name  of  Maltby  and  Co.,  making  them  payable  at  Masterman 
and  Co.'s.  De  Eussett  also  kept  an  account  with  Messrs. 
Prescott  and  Co.  The  bills,  which  were  of  service  in  accompany- 
ing and  passing  the  Hagen  AVharf  warrants,  represented  no 
real  transactions.*  In  one  and  the  same  day,  a  given  sum  of 
money,  received  by  Cole  from  Davidson  and  Gordon  in  the 
morning,  would  pass  through  the  hands  of  the  above  bankers, 
then  to  the  account  of  Colo  Brothers,  at  Glyn's,  and  finally 
pass  again  to  the  account  of  Davidson  and  Gordon  kept  with 
Baraett,  Hoare,  and  Co.,  the  amount  being  slightly  altered  at 
each  transition. 

•  A  specimen  of  the  peculiar  nature  of  the  transactions  between  the 
Ecveral  parties  connected  appears  in  the  annexed  item  of  one  day's  pre- 
feedings,  in  relation  to  the  alternate  transfer  of  the  same  sum  of  money 
fjur  times  over,  to  tlie  separate  accounts  of  each.  "  On  the  2Sth  of 
January,  185-1,  Cole  received  from  Davidson  and  Gordon  the  sum  of 
£1200,  vrhich  ho  paid  into  the  account  with  'De  Eussett,'  at  Prescott's. 
On  the  same  day  he  drew  the  like  amount  from  that  account,  and  paid  it 
into  the  account  with  '  Paris  and  Co.,'  at  Masterman'*,  also  on  the  sasno 
day.  Again,  on  the  same  day,  a  cheque  for  £1216  5«.  (id.  was  drawn  from 
tbc  account  of  Paris  and  Co.,  and  that  amount  paid  into  the  account  of 
'  Colo  Brothers,'  at  Glyn's.  Again,  still  on  the  same  day,  the  sum  of 
£1200  was  drami  out  of  tho  account  of  '  Colo  Brothers,'  and  repaid  to 
Davidion  and  Gordon,  at  Barnett,  Iloare,  and  Co.'s."— 3fr.  Seton  Lainy'a 
Pamphlet. 


IGi  TACTS,   FAILURES,    A^D   TEArj-S. 

It  is  to  be  regretted  tliat  precise  facts  are  not  forthcoming 
wtich  would  serve  to  show  more  of  the  nature  of  the  trans- 
actions entered  into  between  Davidson  and  Gordon  and  other 
parties  in  connection  with  the  fraudulent  warrants  they  so  suc- 
cessfully managed  to  transfer.  Their  transactions  with  Messrs. 
Overend,  Gurney,  and  Co.,  the  discount  bankers,  extended 
back  several  years  prior  to  the  appearance  of  tliese  fraudulent 
warrants.  N^o  sooner,  however,  had  these  warrants  come  into 
their  possession,  than  they  applied  them  to  obtain  advances  on 
their  own  account,  in  which  they  were  so  far  successful  as  to 
palm  off  on  Messrs.  Overend,  Gurney,  and  Co.  simulated  issues 
of  the  nominal  value  of  £80,000. 

The  wharf  had  not  long  been  taken  when  suspicion  arose 
in  one  quarter  as  to  the  invalidity  of  the  warrants  on  which 
Cole,  Davidson,  and  Gordon  so  largely  depended  for  their  re- 
sources. It  was  a  peculiarity  attaching  to  these  warrants  that 
no  individual  noticing  any  irregularity,  or  suffering  by  that 
irresularitv,  could  infer  the  wide  extent  of  the  scheme,  and 
still  less  discover  the  modus  operandi,  or  that  anything  had 
gone  wrong  except  in  that  particular  instance.  In  the  course 
of  1851,  Edwards  and  Mathey,  colonial  brokers,  who  had  ad- 
vanced to  Cole  £2500  on  the  security  of  various  warrants,  had 
their  attention  drawn  to  the  name  of  Hagen's  Wharf  impressed 
on  one  of  these  warrants,  which  together  represented  350  tons 
of  spelter.  The  wharf  had  never  been  heard  of  before,  and 
they  sent  a  clerk  down  to  inquire  after  it,  and  to  inspect  the 
goods.  Maltby,  who  was  at  hand,  pointed  out  the  spelter  to 
the  clerk ;  but  the  clerk,  considering  his  errand  but  half  done, 
appears  to  have  gone  to  the  books  of  the  dock  company,  and 
to  have  discovered  that  there  was  a  "stop"  on  this  spelter  in 
favour  of  another  party.  Mr.  Edwards,  of  the  firm,  was  taken 
by  Gordon  to  Cole,  who  confessed  he  knew  of  the  "  stop,"  inti- 
mating, probably,  at  the  same  time,  that  Gordon  was  to  blame, 
and  that  he  should  have  known  the  metal  answering  to  the 


PACTS,  failuhes,  akd  frauds.  1G5 

"vrarrant  had  been  withdrawn,  for  it  was  on  Gordon's  head  that 
the  ^vrath  of  Mr.  Edwards  fell.  Gordon  could  afford  to  bear 
this  blame ;  but  not  so  Cole,  to  whom  the  disclosure  of  the 
facts  of  the  case  would  have  been  ruin.  Edwards  even 
threatened  Gordon  to  have  him  up  at  the  Mansion  House  that 
afternoon,  but  it  was  finally  arranged  that  the  "  stop"  should  bo 
removed  the  next  day.  This  was  done ;  the  spelter  was  not 
demanded  to  be  delivered  up;  the  loan  was  continued,  and 
paid,  as  agreed  to,  by  instalments,  the  last  instalment  con- 
sisting of  a  cheque  drawn  by  a  firm  in  London,  which  subse- 
quently received  the  very  cheque  from  Davidson  and  Gordon 
of  which  Mr.  Edwards  had  complained. 

In  March  of  1852,  Laing  and  Campbell,  colonial  brokers 
became  possessed  of  Hagen  Wharf  warrants  for  spelter  and 
Swedish  steel  that  had  been  in  the  hands  of  Lackerstein  and 
Co.,  who  had  suspended  payment.  Cole  was  at  once  anxious 
to  get  possession  of  them.  If  thrown  upon  the  market, 
he  would  have  to  meet  them,  and  this  at  an  enormous  loss, 
if  Lackerstein  and  Co.  had  got  possession  of  the  warrants 
on  the  same  easy  terms  as  Davidson  and  Gordon.  The  Hagen 
AVharf  warrants  would  stand  good  for  the  exhibition  of  goods, 
but  not  their  delivery.  Cole  sent  Gordon  as  his  broker  to 
Messrs.  Laing  and  Campbell  to  inform  him  that  the  warrants 
had  been  improperly  obtained.  Laing  and  Campbell  never 
doubted  the  truth  of  the  story,  and  the  warrants,  to  the  nomi- 
nal value  of  £2000,  representing  122  tons  10  cwt.  of  steel, 
and  50  tons  of  spelter,  were  accordingly  taken  back. 

A  business  acquaintance  with  Laing  and  Co.  having  been 
effected,  Colo  concerted  measures  to  obtain  from  that  house  a 
large  advance  on  securities  partly  fictitious  and  partly  genuine. 
They  had  concluded  that  no  man  who  paid  the  large  sum  of 
money  expended  by  Cole  to  redeem  the  warrants  that  had  come 
into  their  possession  could  have  paid  it  out  for  worthless  paper, 
and,  not  dreaming  that  ho  was  implicated  in  the  issue,  they  did 


103  TACTS,    rAILI'IIES,    AKD    TKAUBS. 

not  hesitate  to  advance  tlie  required  amount.  In  July  and 
August  of  1854,  they  advanced  Cole  £30,000  on  warrants  for 
spelter  and  tin.  This  was  but  the  first  of  a  series  of  trans- 
actions to  the  amount  of  £100,000,  the  loans  being  either 
renewed,  or  the  amount  paid  up  when  falling  due. 

Proceeding  on  an  ever-expanding  scale  in  his  operations, 
and  accounted  generally  honourable  in  his  dealings,  and  suc- 
cessful in  his  enterprises,  Cole  began  to  be  looked  on  as  a  first- 
class  man  of  business.  The  year  1853  opened  up  propitiousl\- 
for  all  concerned.  The  difficulties  that  had  occurred  in  passing 
the  Hagen  Wharf  warrant  had  been  arranged.  The  transactions 
of  Cole  the  preceding  year  had  reached  very  nearly  £2,000,000, 
and  there  was  the  certainty  of  his  business  continuing  to 
enlarge.  He  had  already  nearly  obtained  a  monopoly  in  one 
class  of  metals.  His  agents  Davidson  and  Gordon,  with  other 
subordinates  in  his  scheme,  remained  faithful,  and  nothing 
indicated  any  floating  suspicion  in  the  public  mind  of  its 
existence.  These  calculations  were  vain.  Messrs.  Overend, 
Gurney,  and  Co.,  in  the  spring  of  the  year,  sent  down  a  broker 
to  Hagen's  Wharf  to  examine  into  the  copper  and  spelter 
represented  by  warrants  ia  their  possession,  furnished  them  by 
Davidson  and  Gordon,  vrhose  report  was  unsatisfactor}^,  but, 
strange  to  say,  they  never  disclosed  the  fact  to  the  public. 

Maltby's  hands  at  this  time  are  full  of  business,  and,  in 
the  few  brief  moments  of  respite,  he  begins  to  think  the  remu- 
neration for  his  services  (£130  per  annum)  quite  dispropor- 
tioned  to  the  labour  exacted,  as  well  as  unequal  to  the  sup- 
port of  his  family.  Quarter-day  comes,  but  again  and  again 
he  has  to  apply  to  Cole  Brothers  before  receiving  the  amount 
due.  "What  with  his  daily  toil,  and  increasing  necessities,  and 
hope  deferred,  his  mind  is  pre-occupied,  and  his  spirit  de- 
pressed. This  is  just  what  Cole  designs,  that  Maltby,  whose 
disposition  he  has  studied,  may  be  little  incliued  to  reflect  on 
the  possible  appreciation  which  the  great  house  of  Cole  Bro- 


TACTS,   TAILUBES,   A^D   rHAUDS.  1G7 

thers  attaches  to  his  services.  By  aid  of  tliese  services,  Cole 
iras  building  up  a  credit  and  reputation  which  was  enabling 
him  to  extend  his  operations  on  an  enormous  scale,  whilst 
Maltby  felt  doomed,  by  some  iuscrutable  decree  of  fate,  for 
ever  "to  tread  the  same  dull  level."  Maltby  makes  an  applica- 
tion for  an  increase  of  his  salary,  and  the  sum  of  £'200  per 
annum  is  agreed  upon  as  the  future  price  of  his  services. 

But  new  difficulties  arising  out  of  this  artificial  means  of 
obtaining  money  have  to  be  met,  and  difficulties  involving 
great  delay,  expense,  labour,  and  risk.  On  the  5th  and  11th 
of  October,  1853,  Messrs.  Overend,  Gurney,  and  Co.  com- 
menced realizing  the  securities  lodged  in  their  hands  by  David- 
son and  Gordon,  scarcely  compatible  with  the  length  of  time 
during  which  they  had  entertained  misgivings  as  to  the  Hagen 
"Wharf  warrants.  Whether  Messrs.  Overend  and  Gurney 
suffered,  as  is  alleged,  the  whole  of  the  Hagen  AYharf  warrants 
held  by  them  from  Davidson  and  Gordon  to  pass  out  of  their 
hands  at  this  time,  and  afterwards  recalled  the  larger  portion,  is 
not  quite  clear ;  but  it  is  certain,  however,  that  on  the  5th  of 
October  they  secured,  as  the  proceeds  of  spelter  warrants  re- 
presenting 200  tons  of  that  metal,  £4233,  and  on  the  lltli  of  the 
same  month,by  two  sales  of  similar  character  and  amount,£4097, 
making  a  total  of  £8332,  and  that  these  warrants  having  passed 
beyond  recovery,  they  advanced  to  Cole,  who  had  taken  upon  him- 
self the  obligations  of  Davidson  and  Gordon,  318  tons  of  spelter 
of  the  value  of  £4G30  3^.  5d.  The  procedure  was  summary. 
Even  the  usual  course  of  informing  depositors  of  warrants  two 
weeks  before  their  disposal  of  those  documents,  on  the  part  of 
the  holder,  had  not  been  taken.  On  the  morning  of  the  12th  of 
October,  Gordon  entered  his  office  in  a  state  of  alarm.  David- 
son was  there,  and  was  already  supplied  with  the  portentous 
news  which  found  vent  in  the  expression,  *■  Gurney's  are  selling 
ns  up."  Gordon  glanced  at  the  letter  Dandson  had  been 
peru&ing,  and  went  out.      Mr.  AVebb,  an  individual  who  waa 


ICS  TACTS,   FAILURES,   A^'D   TRATIDS. 

connected  witli  Messrs.  Davidson  and  Gordon,  through  the 
"West  Ham  distillery,  happened  to  be  present,  and  astonished 
at  Davidson's  intimation  that  his  business  career  was  thus  sud- 
denljto  come  to  an  end,ask3  what  it  all  means.  Davidson  replied 
by  handing  over  the  letter  for  perusal  of  Webb,  who  found  it, 
according  to  his  statement,  that  Overend  and  Gurney  had  sold 
as  much  as  £30,000  worth  of  copper  at  a  high  price.  "  Why, 
this  is  a  good  sale,"  exclaimed  Webb,  "  if  it  was  bought  for 
£13  105.  and  sold  for  £20."  Davidson  laughed  at  AVebb's 
arithmetic,  and,  doubtless,  turned  away  to  compute  the  chance  s 
that  still  remained  of  being  able  to  regain  "  the  wonted  path 
of  honour." 

The  time  had  come  for  a  specific  understanding  between 
Cole  and  Davidson  and  Gordon  and  Messrs.  Overend,  Gurney, 
and  Co.,  and  an  interview,  remarkable  in  many  respects,  took 
place  on  the  13th  of  October,  between  Mr.  Chapman  and  Cole 
and  Gordon  at  the  establishment  iu  Lombard  Street,  imme- 
diately after  business  hours.  The  subject  of  the  warrants  was 
first  approached  with  an  implied  understanding  as  to  their 
fictitious  character,  though  for  form's  sake,  and  perhaps  for  the 
sake  of  the  temporary  indulging  of  a  hope  which  Mr.  Chapman 
was  loath  to  destroy,  Gordon  was  asked  whether  the  warrants 
represented  "  goods  or  nothing."  The  historic  account  that 
has  been  handed  down  of  the  scene  that  ensued  intimates  that 
thereupon  Gordon  shook  his  head.  Cole,  who  was  next  inter- 
rogated, abandoning  all  pantomime,  gave  it  as  his  confidential 
opinion  that  the  warrants  were  bad.  The  gloomy  business  of 
surveying  the  extent  to  which  his  firm  had  been  involved  by 
the  fraud,  of  ascertaining  the  fictitious  metal  warrants  on  hand, 
as  Avell  as  what  had  become  of  the  money  advanced,  and  by 
what  means  the  debt  incurred  was  proposed  to  be  cancelled, 
occupied  Mr.  Chapman  eight  mortal  hours.  Cole  and  Gordon 
had  not  come  there  without  providing  themselves  with  expe- 
dients by  which  to  encourage  trust  in  the  rectitude  of  their 


FACTS,   FAILUBES,   AND  riJAXID3.  1G9 

intentions,  and  to  excite  a  confidence  in  the  ability  of  one  or 
the  other  party  eventually  to  discharge  the  obligation. 

Suddenly,  in  the  course  of  the  discussion  as  to  ways  and 
means,  there  loomed  up  the  distillery  at  "West  Ham,  Essex, 
the  money  for  which,  as  a  security,  the  warrants  had  been 
lodged,  was  represented  as  having  gone  into  that  establishment, 
to  the  pecuniary  success  of  which  it  had  greatly  contributed. 
Gordon's  tongue  was  now  loosed,  and  he  urged,  with  an  earnest- 
ness  as  fictitious  as  the  warrants  which  had  been  handed  in, 
the  present  and  prospective  prosperity  of  the  distillery.  This 
was  quite  a  new  subject  with  Mr,  Chapman,  who  must  have 
been  struck  with  the  singular  freak  of  fortune  which  had  made 
the  value  of  metal  warrants,  amounting  to  £2G9,092,  depend- 
ent on  the  distillation  of  spirits,  for  it  was  suggested  that  out 
of  the  profits  abundant  means  would  be  found  for  reducing  the 
balance.  Here,  too,  was  a  lease  of  the  property,  which  Mr. 
Chapman  was  at  liberty  to  keep,  but  which  Gordon,  if  not 
Cole,  knew  was  of  doubtful  value,  not  only  on  account  of  the 
circumstances  under  which,  it  was  alleged,  the  establishment 
had  been  obtained,  but  also  from  the  existence  of  other  mort- 
gage deeds.  But  although  this  document  would  hardly  bear 
the  test  of  a  legal  examination,  it  was  surrendered,  and  was 
held  with  a  tenacity  that  withstood  for  a  time  the  importunate 
application  even  of  assignees  in  bankruptcy.  On  this  occasion 
judgment  was  displaced  by  feeling,  and  all  inquiries  were 
avoided  that  might  have  led  to  painful  results.  Overend, 
Gumey,  and  Co.  had  to  choose  between  their  money  and  the 
sacrifice  of  their  customer.  Their  interests  being  involved, 
they  felt  feeble  in  respect  to  acting  independently,  whether  it 
concerned  the  distillation  of  spirits,  or  a  fraud  which  threat- 
ened the  whole  community  with  danger.  Not,  perhaps,  con- 
sciously to  themselves,  but  led  by  the  imperative  facts  of  the 
case,  they  looked  chiefly  to  the  reduction  of  their  balance  with 
Cole,  and  exhibited  an  extraordinary  torpor  in  respect  to  the 


170  FACTS,   TAILUEES,   A^'D   FEAUDS. 

further  doings  of  that  individual.  Under  tlie  circumstances, 
the  exposure  of  the  fraud  was  believed  to  be  a  duty  which  did 
not  belong  to  them.  They  had  entered  into  an  engagement 
with  Cole  for  profit,  and  they  were  merely  conforming  to  the 
necessities  of  a  course  which  would  secure  them  reimburse- 
ment, and  prove  their  discretion. 

The  practical  skill  with  which  Cole  could  direct  on  others  im- 
putations that  might  as  fairly  lodge  against  himself,  was  rendered 
evident  in  this  interview,  in  which  he  managed  to  put  himself  in 
the  position  of  a  fellow-sufferer  with  Messrs.  Overend,  Gurney, 
and  Co.  He  liad  liimself,  he  affirmed,  lent  the  warrants  to 
Davidson  and  Gordon ;  that  he  found  he  could  not  get  them 
back  again,  and  that  he  had  withdrawn  the  metal.  This  was  a 
new  variation  of  the  system  of  alleging  "  stops  "  to  be  on  the 
warrants,  which  had  been  so  unsuccessfully  attempted  in  the 
case  of  other  parties.  Xo  wonder  that  Mr.  Chapman  should 
take  courage  in  presence  of  Cole  to  turn  round  and  say  to 
Gordon,  "  I  believed  you  to  be  an  upright  man,  I  now  only 
look  upon  you  as  a  thief;  "  *  no  wonder  that  Cole  should  have 
the  courage  to  tell  Mr.  Chapman  that  all  the  warrants  were 
invalid,  except  some  for  steel.  Cole,  taking  the  responsibility 
of  the  whole  matter  on  himself,  finally  handed  in  to  Messrs. 
Overend,  Gurney,  and  Co.  a  promissory  note  for  £120,000, 
from  Davidson  and  Gordon,  endorsed  by  himself,  payable  on 
demand  with  interest,  at  5  per  cent,  per  annum,  from  the  27th 
inst.,  as  further  collateral  security  for  their  advances.  At  the 
close  of  this  interview,  Mr.  Chapman  said,  "  !N^ow,  understand, 
that  what  has  taken  place  here  to-night  must  not  go  beyond 
these  walls  ;  "  indeed,  he  might  very  fairly  have  addressed  to 
Cole  the  speech  of  Duke  Ernest  to  the  Count  of  Egesheim  in 
"Horaj  Germanicae  :  " — 

*  It  should  be  stated  that  Mr.  Chapman,  when  examined,  on  the  trial 
of  Gordon,  on  the  23rd  of  August,  1855,  expressed  a  doubt  whether  he 
had  used  this  particular  expression. 


FACTS,   FAILFBES,   A^D   FRAUDS.  171 

"  Thou  feel'st  compassion  trulr, 
Nor  shall  I  hence  depart  quite  unconsoled. 
But  look  not  round  thus  anxiously  ; 
(Boi?,  our  confidential  clerk,  can  be  trusted)  in  sooth 
Ko  one  is  here  to  mark  that  thou  hast  spoken." 

The  aggregate  sum  advanced  to  Cole  by  Messrs.  Overend, 
Gurney,  and  Co.,  from  October,  1S51,  to  September,  1852, 
when  the  balance  against  him  reached  its  highest  figure,  was 
£268,030,  whilst  the  repayments  of  cash  made  by  Cole  during 
the  same  period  amounted  to  but  £13,790,  leaving  the  montl^ly 
balance  against  liim,  for  the  last-named  date,  £252,240.  From 
the  month  of  September,  for  reasons  possibly  to  be  found  in 
the  unwillingness  of  Messrs.  Overend,  Gurney,  and  Co.  to 
receive  such  disproportionate  repayments,  the  account  current 
of  Messrs.  Overend,  Gurney,  and  Co.  shows  that  their  balance 
was  gradually  diminished.  "When  the  realization  of  securities 
began,  which  was  in  October,  1853,  the  monthly  balance  in 
favour  of  Messrs.  Overend,  Gurney,  and  Co.  stood  at  £195,G55, 
repayments  having  been  made  by  Cole  to  the  amount  of 
£71,375.  However,  the  balance  in  favour  of  Messrs.  Overend, 
Gurney,  and  Co.  had  stood  at  £195,655  from  August,  or  dur- 
ing the  two  preceding  months. 

On  the  morning  after  the  interview  with  Mr,  Chapman, 
in  Lombard  Street,  Gordon  entered  his  oflBce,  exclaiming: 
"  Well,  I  have  told  Overend  and  Gurney  everything."  To  the 
question  of  Webb,  who  was  again  present  as  an  interrogator, 
"What  is  ever^-thiug  ?  "  Gordon  replied,  "The  warrants  wo 
have  deposited  with  Overend  and  Gurney ;  we  can't  deliver  the 
8i)elter,"  and  being  further  pressed,  he  added  tliat  the  party  to 
whom  the  spelter  belonged,  and  of  whom  it  was  bought,  was 
not  paid,  and  had  stopped  the  delivery.  He  had  been,  he  said, 
with  Mr.  Chapman  and  Cole  until  twelve  o'clock  the  night 
before,  and  had  been  obliged  to  acknowledge  that  he  owed  Colo 
£  120,000.  To  the  inquiry  if  he  did,  he  had  said,  "  K^o."    At  the 


172  FACTS,    FAILUEES,   AIsD   FEATJDS. 

close  of  the  interview,  Mr.  Chapman  had  turned  round  and 
said  to  him,  he  was  a  man  always  held  up  as  an  example  in  the 
City,  as  being  a  first-rate  man  of  business,  and  a  man  of  great 
perseverance  ;  and  he  had  looked  on  him  as  a  pattern  in  the 
world  of  business ;  after  which  he  had  said,  "  I  am  sorry  to 
find,  Gordon,  that  you  are  a  thief."  Gordon,  by  "Webb's 
account,  was  "very  much  cut  up,"  and  "sat  there  some  time 
without  saying  a  word,"  "Whatever  the  character  of  his  medi- 
tations, they  do  not  appear  to  have  led  to  the  determination  of 
abandoning  a  system  which,  even  in  this  exceptional  case, 
appeared  to  work  most  admirably.  Discount  transactions  were 
still  continued  by  them  with  Overend,  Gurney,  and  Co.,  the 
cash  received  from  October  13  to  June  9,  amounting  to 
£21,101.  Cole,  at  this  period,  could  not  fail  to  discover  that 
he  was  virtually  in  a  state  of  insolvency.  "With  the  lease  of  the 
distillery,  from  which  so  much  was  expected,  in  the  hands  of 
Messrs.  Overend,  Gurney,  and  Co.,  and  that  firm  pressing  him 
for  more  money,  with  Davidson  and  Gordon  ah-eady  deeply  in- 
volved, and  his  own  transactions,  now  carried  on  at  every  hazard, 
and,  independently  of  rising  and  falling  markets,  being  far  from 
prosperous  ;  further,  with  the  great  proportion  of  outstanding 
warrants  false,  and  himself  hourly  subjected  to  retrieve  them 
back  at  ruinous  cost,  Avhere  could  any  hope  of  assistance 
arise. 

A  bolder  policy  was  now  desirable  ;  the  career  of  Cole,  and 
even  that  of  Davidson,  had  been  brightened  up  in  an  unex- 
pected degree  by  what  had  transpired  at  the  house  of  Overend, 
Gurney,  and  Co.  on  the  13th  of  October.  After  all  hig  delin- 
quency, Gordon,  according  to  the  after  testimony  of  Bois,  the 
confidential  clerk,  had  been  treated  as  a  gentleman ;  and  if  Mr. 
Chapman  had  really  said  to  him,  "  I  believed  you  to  be  an 
upright  man,  I  now  only  look  upon  you  as  a  thief,"  he  and 
Davidson  and  Cole  were  willing  to  take  the  expression  as  the 
qualified  satire  suggested  by  a  somewhat  severe  benevolence. 


FACTS,   FAILUnES,   AND   FRAUDS.  173 

pointed  without  veuom,  and  keen  without  asperity,  designed  to 
correct  and  not  to  punish,  to  be  remedial  and  not  vindictive. 
The  more  serious  apprehensions  entertained  in  this  quarter 
having  been  put  an  end  to,  by  what  was  virtually  a  compromise, 
there  remained,  if  they  would  fully  relieve  their  minds  of  what 
next  weighed  most  heavily  upon  them — the  disposition  of  a 
debt  of  £18,559,  due  to  Freeman  and  Co.,  merchants  of  Bristol, 
for  copper  entrusted  to  them  for  sale,  but  which  they  had  mis- 
appropriated. Mr.  Vaughan,  one  of  the  members  of  the  Bristol 
firm,  was  invited  to  come  up  to  London ;  and,  on  his  arrival, 
Davidson  and  Gordon  confessed  the  delinquency,  and  made 
known  their  inability  immediately  to  refund,  at  the  same  time 
seeking  to  palliate  the  irregularity  by  representing  that  the 
copper  had  been  applied  to  the  purposes  of  their  distillery 
at  West  Ham,  and  proposing  repayment  out  of  the  profits 
of  that  establishment.  The  great  money  brokers  in  Lombard 
Street  had  not  been  treated  to  any  specific  estimate  of  tliese 
profits,  which  were  thus  engaged  to  do  double  work  in  the  way 
of  liquidation.  It  was  now  affirmed  that  the  revenue  of  the 
concern  reached  the  sum  of  £20,000  per  annum.  The  copper, 
therefore,  which  had  been  so  confidingly  entrusted  to  them  for 
sale,  but  which  they  had  misappropriated,  was  to  be  regarded 
as  having  been  safely  invested,  inasmuch  as  it  had  been  swal- 
lowed up  in  the  distillery, which  was  represented  to  Mr.  Vaughan 
as  having  nothing  speculative  in  its  character,  and  to  be  per- 
fectly independent  of  all  those  sudden  and  unforeseen  casualties 
which  will  frequently  overthrow  the  best  calculations.  To 
satisfy  Mr.  Vaughan  beyond  their  mere  note  or  word,  they  put 
into  his  hands  a  fictitious  warrant  for  steel  of  the  assumed 
value  of  £1700  or  £1800,  with  some  worthless  Westminster 
bonds  for  £8000,  and  a  promissory  note  equally  valueless, 
accepted  by  AVebb,  who  had  leased  to  them  the  distillery.  This 
was  not  all.  Four  months  had  scarcely  elapsed,  when  Mr. 
Vaughan  was  applied  to  by  Gordon  for  a  loan  of  £1900  on  a 


174}  TACTS,   TAILrEES,   A>'D    FEAUDS. 

promissory  note  for  £2500,  secured  by  a  fictitious  -warrant, 
nominally  of  higher  value,  in  order  to  enable  him  to  meet  bills 
of  exchange  attached  to  the  bills  of  lading  of  a  cargo  of  barley, 
which  Davidson  was  alleged  to  have  shipped  from  Spain  for  the 
use  of  the  distillery.  Whenever  the  distillery  could  be  brought 
in  to  bear  on  conversation  or  business,  Gordon  was  enabled  to 
entrance  the  senses  of  his  hearers,  and  probably  efiected  as 
much  service  by  it,  through  haviug  it  continually  on  his  lips, 
as  by  the  actual  distillation  of  spirits.  Twice  already  the  dis- 
tillery had  proved  of  signal  service  in  effecting  a  settlement  of 
uncomfortable  disclosures,  and  a  third  time  it  was  put  to 
account  in  the  way  of  negotiation.  Mr.  Vaughan  acceded  to 
Gordon's  rec[uest,  and  made  the  advance,  and  when  on  the 
succeeding  April,  the  loan  was  found  not  to  have  been  paid, 
though  over-due,  the  spelter  warrant  continued  to  be  looked  to 
by  the  Bristol  house  as  something  more  tangible  than  the 
promissory  note,  and  Maltby  as  a  responsible  character.  An 
action  was  brought  against  the  wharfinger,  for  which  a  verdict 
of  £2300  was  obtained. 

Messrs.  Overend,  Gurney,  and  Co.  had  transactions  with 
Cole  subsequent  to  the  interview  of  October  13th.  The 
genuine  securities  held  by  them  on  the  5th  of  that  month  were 
of  the  nominal  value  of  £269,092 — a  sum  which,  when  added  to 
the  nominal  value  of  the  fictitious  securities,  gave  £323.230 
an  amount  exceeding  by  £127,575  that  advanced  by  the 
house. 

With  all  his  activity,  Cole's  operations  did  not  from  this 
time  turn  to  his  advantage.  He  distinguished  himself,  indeed, 
by  eager  and  energetic  rapidity,  but  disadvantages  of  all  kinds 
attended  his  course,  including  the  buying  up  of  fictitious  war- 
rants to  meet  the  emergencies  his  course  opened  up,  including 
the  losses  on  sales  of  metal,  and  interest  on  enormous  loans. 
Yet  his  transactions  the  first  six  months  of  this  year  amounted 
to  not  less  than  £770,750  ISs.  6d. 


FACTS,   rAILUEES,    A>'D    FRAUDS.  175 

It  was  in  the  very  crisis  of  Cole's  affairs,  when  Hageu 
"Wharf  warrants  to  the  value  of  hundreds  of  thousands  of  pounds, 
representing  both  dutiahle  and  free  goods,  and  when  probably 
a  still  larger  number,  and  for  a  still  greater  amount,  had  been 
issued  and  recalled — a  date,  too,  at  which  the  fraudulent  cha- 
racter of  these  warrants  was  known  to  Messrs.  Overend, 
Gumey,  and  Co.,  that  Maltby  took  out  his  license,  he  and 
Harris  de  Eussett,  giving  bond,  with  approved  security  to  the 
recognized  authorities.  By  directing  Maltby  to  obtain  a 
license.  Cole  increased  the  responsibility  of  tho  wharfinger  for 
previous  transactions,  and  coupling  Dc  Russett's  name  with  the 
transaction  giving  additional  weight,  although  the  latter  was 
virtually  a  man  of  straw. 

AVliilst  Cole  was  reducing  his  balance  with  Messrs.  Over- 
end,  Gumey,  and  Co.,  he  insured  possession,  by  the  process 
that  has  been  already  explained,  o..  a  sufficient  number  of 
Hagen  "WTiarf  warrants  to  enable  him  to  continue  transactions 
which  were  assuming  a  formidable  magnitude.  His  cash  ac- 
count for  the  previous  year  showed  payments  amounting  to  no 
less  than  £2,000,744 ;  and  had  time  allowed,  these  pajrmenta 
would,  doubtless,  in  this  year  have  extended  even  further.  Of 
emergencies  he  had  to  meet  was  the  pressure  which  Messrs. 
Overend,  Gumey,  and  Co.  were  applying  for  the  liquidation  of 
their  balance ;  and  it  so  happened  that  in  one  endeavour  to 
collect  and  secure  further  means,  he  unwittingly  increased  the 
balance  against  himself  in  the  house  in  Lombard  Street,  and 
occasioned  a  most  startling  and  unexpected  rencontre.  Cole 
had  applied  to  Messrs.  Short  and  Co.  for  an  advance  of 
£10,500  on  the  security  of  fictitious  spelter  and  tile  and 
copper  warrants,  representing  414  tons  of  metal,  together  with 
warrants  perfectly  genuine  for  185  tons  of  metal.  Messrs. 
Short  and  Co.,  never  doubting  tho  sufilcient  worth  of  tho 
tendered  batch  of  warrants,  granted  tho  application,  end 
carried  it  to  Messrs.  Overend,  Gurney,  and  Co.,  to  obtain 


176  FACTS,   FAILirilES,    A^-D   FRAUDS. 

from  them  a  similar  advance.  To  refuse  tlie  application  woiilu 
have  been  to  pronounce  the  doom  of  the  Hagen  "Wharf  war- 
rants, and  to  relinquish  all  further  hopes  of  the  reduction  of 
their  balance  in  the  account  with  Cole ;  so  the  application  was 
at  once  accepted,  and  Messrs.  Short  and  Co.,  by  Cole  not 
making  good  the  loan  at  the  exact  time  it  fell  due,  saw  no 
occasion,  on  the  whole,  to  be  dissatisfied  with  the  transaction. 

In  the  course  of  the  year  1854,  rumours  reached  Laing 
and  Campbell  that  "  something  was  wrong"  with  the  Hagen 
AVharf  warrants.  On  the  18th  of  May,  1854,  lightermen  were 
sent  down  to  Hagen's  "Wharf  with  two  warrants  for  spelter, 
without,  however,  succeeding  in  obtaining  it.  The  person  who 
had  lodged  the  warrants  with  Messrs.  Laing  and  Campbell 
was  equally  unsuccessful  on  applying  the  following  day,  and  a 
elerk  was  sent  down  by  the  firm  to  inquire  into  the  reason 
why  the  goods  were  withheld.  Maltby  showed  him  spelter  in 
abundance,  and  advised  him  to  come  down  next  morning,  by 
which  time  he  would  arrange  with  Cole  for  the  warehouse 
rent,  which  alone  interfered  with  immediate  delivery.  The 
next  day  both  parties  made  their  appearance  together,  when 
the  same  pantomime  was  gone  through.  The  difficulty  of  the 
rent  continued,  and  they  had  to  "  call  again."  A  special  order 
was  obtained  from  the  previous  holders  of  the  goods,  yet 
Maltby  again  declined  to  deliver,  conducting  his  friends  for 
the  third  time  over  the  ground-floor  of  the  warehouse  of 
Groves  and  Sons,  and  showing  them  a  large  amount  of  tin  and 
spelter,  which  might  or  might  not  be  under  the  control  of 
Cole.  A  notice  was  next  served  on  Maltby  and  De  Eussett 
by  Laing  and  Campbell,  furnishing  them  with  the  list  of  the 
warrants  in  their  possession  received  from  Cole,  and  giving  a 
warning  against  delivering  the  goods  to  any  other  party.  By 
Cole's  desire,  Mr.  Laing  next  waited  on  Cole,  who  explained 
that  neither  he  nor  De  Eussett  had  anything  to  do  with  the 
wharf,  and  that  Maltby  was  the  sole  lessee,  but  refusing  to 


PACTS,  TAILUBES,  AND  PKAUDS.  177 

come  to  any  definite  arrangement.  Nothing  now  remained 
but  an  application  on  the  part  of  Laing  and  Campbell  for 
delivery  of  all  the  goods  for  which  they  held  warrants,  on  the 
ground  that  they  had  "  very  weighty  objections"  to  the  goods 
continuing  to  lie  at  Ilagen's  Sufferance  "Wharf,  and  an  inti- 
mation to  this  effect  was  given  to  Cole.  Maltby,  on  the  same 
day,  was  shown  all  the  warrants,  and,  on  inspecting  them,  de- 
clared there  were  no  duplicates,  that  there  was  metal  to  meet 
them,  but  added  that  he  had  received  an  injunction  from  Cole 
not  to  deliver  the  goods.  Cole  subsequently  refused  per- 
sonally to  give  an  order  for  the  delivery,  and,  in  the  presence 
of  another  gentleman,  was  accused  by  Mr.  Laing  of  having 
given  him  spurious  warrants.  The  apparent  market  value  of 
the  warrants,  genuine  and  fictitious,  held  by  Messrs.  Laing 
and  Campbell  from  Cole  Brothers,  amounted  to  £18,000,  a 
sum  not  to  be  trifled  with.  They  accordingly  consulted  their 
solicitor  as  to  the  steps  to  be  taken  for  recovery.  Then 
followed,  on  the  part  of  Cole,  a  series  of  promised  explana- 
tions, attempted  settlements,  and  skilful  delays  in  approaching 
the  issue  between  himself  and  Laing  and  Campbell.  Finding 
himself  threatened  with  legal  proceedings,  he  began,  in  his 
turn,  to  threaten  to  prosecute  the  firm  for  defamation,  and 
went  so  far  as  to  authorize  his  solicitor  to  sue  in  the 
Exchequer.  Cole's  sagacity  was  at  fault  in  this  matter,  and  it 
was  not  considered  advisable  to  proceed. 

Had  the  endorsements  on  the  Hageu  "Wharf  warrants  not 
been  genuine,  the  mystery  might  easily  have  been  unravelled. 
How  was  it  these  warrants  were  not  effective  to  secure  the 
goods  they  represented  ?  Xo  answer  could  be  given,  and  no 
duplicates  made  their  appearance,  the  fact  being  that  this 
species  of  transferable  security  leaves  no  trace,  no  permanent 
lists  of  warrants  being  usually  made,  and  these  lists  being  de- 
stroyed as  soon  as  the  warrants  are  transferred  or  their  con- 
tents realized.    Inquiry  satisfied  holders  that  the  goods  repre- 

2f 


17S  TACia,   FAILI7EES,   AXD   FEATIDS. 

sented  on  the  face  of  these  documents  had  actually  been  im- 
ported ;  there  was  no  error  either  as  to  amount,  or  dates,  or 
vessels,  or  as  to  whom  the  goods  were  made  deliverable. 

In  the  month  of  May,  1854,  Messrs,  Sill  and  Mugins, 
produce  dealers,  of  Liverpool,  who  had  some  acquaintance  with 
Joseph  TVindle  Cole,  and  had  sent  him  their  trade  circular  for 
several  years,  were  called  on  by  his  brother,  who  stated  that 
Cole  Brothers  had  a  parcel  of  metals  which  they  did  not  wish 
immediately  to  dispose  of,  and  would  be  happy  to  receive  an 
advance  on  this  security.  Eegret  was  at  the  same  time  ex- 
pressed that  nothing  should  have  occurred  before  this  to  lead 
to  business.  It  was  proposed  that  Sill  and  Mugins  should 
draw  on  them  for  the  amount  required,  discounting  the  bill  at 
their  own  bank.  The  managers  of  the  bank  were  to  lodge  the 
amount  with  Glyn's,  to  be  handed  to  Cole  Brothers  against 
warrants.  This  arrangement  was  agreed  to  after  some  in- 
quiry at  the  Liverpool  Borough  Bank,  and  Sill  and  Mugins 
drew  upon  Cole  Brothers,  at  three  months'  date,  for  £25,000, 
the  sum  which  had  been  advanced. 

Davidson  and  Gordon  now  felt  they  could  not  long  avert 
their  impending  doom.  The  intimate  knowledge  possessed  by 
them  of  the  branch  of  business  with  which  they  were  con- 
nected as  metal  brokers,  had  been  used  to  counsel  and  promote 
undertakings  only  remarkable  for  the  vast  and  varied  wicked- 
ness which  marked  both  their  conception  and  execution- 
Ever  since  the  memorable  night  of  October  13,  1853,  tlie 
stately  tree  of  their  fictitious  fortune  had  begun  to  wither, 
root  and  branch.  They  had  fraudulent  warrants  out  on  their 
own  account  for  £150,800,  and  yet  they  felt  hampered  at  every 
turn.  The  suspicions  directed  against  Cole  reacted  on  them- 
selves. There  could  be  no  further  acceptance  of  the  warrants  ; 
the  distillery,  so  long  a  means  in  their  hands  of  exciting 
confidence  in  fabulous  resources — a  property  that  Gordon 
had  originally  obtained  from   Mr.  Thomas    Webb    and  the 


TACTS,   FAILUEES,  AKD   FItA.UDS.  17D 

lease  of  \vhich  was  in  the  strong  grasp  of  the  legal  ad- 
viser of  a  firm  they  had  defrauded,  was  now  a  dead  weight 
tipon  thorn,  and  no  resource  was  left  for  them  but  to 
stop  payment  and  abscond.  Procecdiug  to  West  Ham,  they 
gave  to  the  officer  of  excise  a  cheque  they  were  well  aware 
would  be  dishonoured,  for  all  duties  claimed,  and  on  raalcing 
large  deliveries  of  the  stock  thus  liberated  to  their  usual  cus- 
tomers, they  obtained  cheques,  which  were  immediately  cashed, 
and  acceptances,  which  were  discounted,  to  the  amount  of 
£2G00.  Of  this  sum,  £1700  was  handed  over  to  their  solicitor, 
who  subsequently  paid  out  of  it  £1200  to  the  assignees  of  the 
estate  in  bankruptcy.  All  these  transactions  took  place  within 
a  few  hours.  The  flight  of  Davidson  and  Gordon,  partners  in 
destiny  as  in  trade,  was  precipitate.  On  the  19th  of  June, 
just  as  the  star  of  their  credit  was  about  to  sink,  they  stepped 
on  board  a  steamer  for  Ostend,  furnished  with  passports,  which 
represented  one  as  "  un  rentier,'"  the  other  as  "  un  domestiqite." 
The  distinction  of  master  and  servant  was  abandoned  as  soon  as 
London,  the  scene  of  their  depredations,  had  disappeared  from 
off  the  line  of  vision,  and,  coming  upon  the  swell  of  the  channel, 
Davidson  and  Gordon  doubtless  breathed  more  freely  than 
they  had  done  for  years. 

And  now  the  day  of  retribution  had  arrived.  The  announce- 
ment that  their  affairs,  through  the  ill  success  of  their  operations 
in  metal8,and  the  heavy  expenditure  on  the  West  Ilam  Distillery, 
had  become  irretrievably  involved,  created  some  sensation,  and 
this  being  followed  by  the  intimation  that  they  had  suddenly 
decamped,  created  further  rumours  exceedingly  prejudicial  to 
themselves  and  the  whole  of  their  associates.  Through  this 
occurred  the  first  break-down  of  the  conspiracy.  The  suspen- 
sion of  Messrs.  Davidson  and  Gordon,  their  connection  with 
Messrs.  Cole  Brothers,  or  rather  Joseph  Windle  Cole,  and 
the  disagreeable  statements  circulated  soon  were  productive 
of  an   unsatisfactory  influence,  and  Mr.  Cole  was  at  length 


ISO  TACTS,   FAILUEES,   AKD   FEAVDS. 

himself  obliged  to   commit  irregularities  iu  meeting  bis  pav- 
rnents. 

Suspicion  was  now  deeply  entertained  of  the  stories  re- 
specting the  heavy  complicity  of  J.  W.  Cole  in  fraud  and  the 
issue  of  large  numbers  of  simulated  warrants.  Maltby  was 
no  longer  to  be  found  at  the  wharf.  He  had  deserted  his 
post,  with  all  its  emoluments  and  all  its  dangers.  Messenger 
after  messenger  came  down  to  see  after  the  position  of  Avar- 
rants  in  the  hands  of  impatient  holders.  There  was  the 
manager  of  the  Liverpool  Borough  Eank  still  wavering  as  to 
whether  he  should  give  up  this  security  not  worth  a  farthing 
for  a  bill  of  lading  for  two  thousand  boxes  of  sugar.  Mer- 
chants and  clerks,  solicitors  and  bankers'  messengers,  looked 
in  from  time  to  time  to  learn  the  interesting  news  that  Maltby 
was  "in  the  country,"  and,  when  they  became  importunate, 
were  referred  to  his  private  solicitor,  who  had  engaged  to 
make  all  necessary  explanations.  Thus,  vs^hilst  the  holders  of 
the  fictitious  warrants  were  alternating  between  hope  and  fear, 
w.ere  conning,  in  close  and  heated  rooms,  the  mystery  which, 
for  all  that  appeared  on  the  face  of  it,  Maltby  alone  could 
solve,  they  were  left  to  imagine  that  important  personage  re- 
freshing himself,  after  his  watchful  and  ill-compensated  labours, 
with  a  continental  tour,  making  Belgium  the  great  centre  of 
his  temporary  wanderings. 

As  soon  as  the  news  reached  Liverpool  that  the  bills  of 
Cole  Brothers  had  been  dishonoured,  and  that  the  house  was 
involved  in  difficulties,  Mr.  Sill,  and  the  managers  of  the  Liver- 
pool Borough  Bank,  took  measures  to  inquire  into  the  property 
represented  by  the  warrants.  The  latter  party  received  from 
their  solicitor  the  sage  advice  to  realize  at  once,  evidently  from 
the  impression,  that  as  there  was  not  sufficient  metal  to  pro- 
vide for  all  the  warrants,  the  recovery  of  goods  represented  by 
them  was  to  be  determined  by  priority  of  claim.  All  such 
calculations  were  vain.     The  clerk  sent  down  to  Hagen's  Wharf, 


TACTS,   FAILUEES,  AKD   TBAUDS.  ISI 

on.  the  part  of  the  bank,  was  simply  badgered.  Sill,  who  went 
up  to  London  on  this  business,  had  to  content  himself  with 
attending  at  the  office  of  Cole  several  days,  in  the  ineffectual 
endeavour  to  see  that  individual,  meanwhile  obtaining  materials 
for  a  most  amusing  account,  which  he  afterwards  gave  to  the 
manager  of  the  Liverpool  "Borough  Bank,  who,  on  the  4th  of 
July,  followed  him  to  town.  It  was  explained  by  Sill  how  the 
clerk  had  not  cared  to  introduce  him,  how  Joseph  AVindle  Cole 
had  not  cared  to  see  him,  how  the  brother  of  Cole  had  informed 
him  that  Cole  Brothers  would  "  go  on  again,"  and  how  he 
(Sill)  should  be  easy  about  the  warrants,  as  there  was  enough 
metal  to  meet  them,  and  his  brother  (J.  W.  Cole)  was  an 
honourable  man.  Previous  to  leaving  Liverpool,  the  manager 
of  the  Liverpool  Borough  Bank  had  received  an  offer  from  Cole 
to  give  a  cargo  of  sugar  in  exchange  for  the  warrants,  upon 
which  he  telegraphed  to  the  solicitor  not  to  enter  into  any 
compromise  until  he  had  arrived.  Now  came  up  the  question 
of  acceptance.  It  was  urged  that  there  were  many  unpleasant 
rumours  in  connection  with  Maltby's  name,  and  that  though 
there  was  no  doubt  the  warrants  were  good,  it  was  best  to 
make  the  exchange.  "With  evident  reluctance — for  it  was  sur- 
mised by  the  manager  that  the  warrants  might  possibly  prove 
of  larger  value — the  whole  were  released  for  a  bill  of  lading  for 
2000  boxes  of  sugar,  of  the  estimated  value  of  £8000. 

With  Davidson  and  Gordon  ruined  and  absent,  with  Maltby 
secreted  at  Ostend,  with  no  more  work  to  be  done  at  Hagen's 
Wharf,  no  fictitious  warrants  to  be  signed,  with  holders  of 
those  in  existence  pressing  upon  him,  or  looking  for  some 
means  of  compensation,  the  state  of  Colo's  affairs  might  have 
been  considered  hopelessly  irretrievable.  But  in  this  great 
emergency,  with  a  firmness  that  approached  obstinacy,  he  chose 
to  depend  on  the  precautionary  measures  lie  had  taken.  Self- 
reliant,  he  trusted  to  the  effect  o^  downright  daring,  and  stood 
to  face  the  storm  that  tlireatened  completely  to  annihilate  him. 


1S3  FACTS,   FAILrEES,   A^^)   TEAUDS. 

It  is  to  be  remembered  that  the  scheme,  as  a  scheme,  was  not 
surmised  ;  the  stoppage  of  the  delivery  of  goods  lodged  as  se- 
curity for  -warrants,  on  the  presentation  of  these  warrants,  had 
ensued ;  it  was  not  so  much  as  suspected  that  the  warehouses 
adjoining  the  wharf  were  not  held  by  its  lessee. 

Even  after  his  paper  had  been  refused,  and  he  had  virtually 
suspended.  Cole  spoke  of  "going  on  again,"  and,  favoured  by 
the  disappearance  of  IMaltby,  he  had  hopes  of  allaying  the 
general  mistrust  excited  as  to  his  own  share  in  the  business. 
He  could  confidently  rely  on  the  silence  of  those  who  had 
become  pecuniarily  interested  in  the  continuance  of  his  frauds, 
or,  at  least,  in  the  success  of  his  undertakings.  Involved  as 
he  was,  he  relied  on  their  quiescence  or  passivity  to  bring  him- 
self round,  on  the  condition  of  ultimately  saving  them  from 
loss.  He  had,  in  some  instances,  dipped  deeply  into  their 
resources  ;  and  whilst  proceeding  with  no  unnecessary  celerity 
ill  lessening  balances  against  himself,  he  sought  to  avert  fur- 
ther pressure  by  holding  out  to  the  claimants  the  prospect  of 
future  relief.  But  the  wheels  of  business  revolved  slower  and 
slower,  and  on  the  27th  day  of  June,  1854,  the  same  month 
which  had  been  marked  with  the  suspension  of  Davidson  and 
Gordon,  and  the  flight  of  Maltby,  Joseph  "Windle  Cole  stopped 
payment. 

The  discreditable  negotiations  entered  into  by  Cole  with 
various  pai'ties  for  withdrawing  outstanding  warrants  of  a 
fictitious  character,  the  property  disposed  of  under  arrauge- 
ment,  the  influence  exerted  to  prevent  public  knowledge 
of  numerous  transactions  of  a  similar  character,  reflect  little 
honour  on  the  parties  concerned.*  The  simulated  warrants  in 
circulation  at  the  time,  on  the  part  of  Cole  Brothers,  repre- 
sented nominally  a  value  of  not  less  than  £367,800;  while 

*  To  show  the  feeling  at  this  moment,  -nhen  the  topic  was  the  gossip 
of  the  City,  the  general  remark  was,  that  "  every  one  was  trying  to  do  the 
best  for  himself." 


FACTS,  TAILUKES,  ASD  TBArDB.  183 

like  documents  credited  to  Davidson  and  Gordon  were  esti- 
mated at  not  less  than  £150,800,  making,  in  all,  the  enormoua 
total  of  more  than  half  a  million  of  pounds.  In  addition  to 
the  sum  of  £54,138,  obtained  by  Messrs.  Overend,  Gurney, 
and  Co.,  on  the  sale  of  metal  represented  by  genuine  warrants 
lodged  in  their  hands  on  October  5, 1853,  they  realized,  on 
warrants  in  their  custody  as  security  for  advances  equal  to 
£71,620,  the  sum  of  £87,001,  thus  further  reducing  the 
balance  in  their  favour  by  £15,381.  Additional  securities  de- 
posited and  realized  increased  this  amount  to  £19,082. 

The  flight  and  subsequent  history  of  Maltby,  who  incurred 
throughout  this  long  series  of  criminal  operations  a  far  greater 
responsibility  than  he  appears  to  have  been  made  aware  of,  con- 
stitutes an  interesting  episode  to  these  transactions.  It  was 
the  unexpected  sequel,  occasioned  by  Maltby's  ieath  in 
Newgate,  when  awaiting  trial,  that  prevented  one  of  the 
most  important  portions  of  the  drama  from  being  played  out. 
Cole,  on  various  grounds,  urged  Maltby  to  leave  the  country ; 
circumstances  were  unpleasant,  and  the  issue  of  affairs  was 
doubtful.  Unquestionably,  Cole  foresaw  that  in  Maltby'a 
absence,  the  chances  of  success  in  diverting  suspicion  from 
himself  would  be  increased.  It  was  to  be  hoped  that  all  per- 
sonal inquiries  as  to  the  authority  under  which  the  Hagen 
"Wharf  warrants  had  been  issued  would  thus  be  set  at  rest  j 
that  no  charge  of  conspiracy  would  receive  any  countenance, 
and  that  Maltby  would  bo  alone  inculpated.  Cole's  policy  of 
restricting  Maltby  to  the  lowest  possible  amount  of  available 
funds,  60  as  to  keep  him  more  completely  under  control,  waa 
continued  up  to  the  moment  of  departure,  when  he  left  London 
for  Ostend,  with  scarcely  the  means  to  defray  necessary 
expenses.  According  to  a  letter  from  Maltby  to  his  wife,  who 
subsequently  joined  him  in  his  retreat,  he  left  England  at 
"  Cole's  advice  and  request,"  and  while  confessing  he  waa 
deeply  to  blame,  he  adds  that,  "  when  the  business  had  gone  on 


184  TACTS,   TAILUEES,   A^-D  rKAUDS. 

in  the  same  way  for  so  maDy  years,  he  felt  every  confidence  in 
Cole."  Maltby  learns  from  Cole  that  the  solicitor  of  Davidson 
and  Gordon  "  is  exerting  himself  to  mitigate  the  angry  feeling 
against  them ;"  and  further,  that  it  was  his  (Maltby 's)  "  signa- 
ture to  an  account "  that  was  making  some  noise  in  London. 
In  this  same  letter,  written  by  Cole  little  more  than  a  fortnight 
after  his  stoppage,  he  remarks :  "  It  might  be  more  comfortable 
to  you,  as  you  do  not  like  where  you  are,  to  go  on  to  the  lively 
capital,  and  to  live  somewhere  in  the  environs,  but  your  address 
ought  not  to  be  known  to  more  than  one  party  here,  if  you 
wish  to  avoid  annoyance."  Maltby  was  then  put  in  cor- 
respondence with  a  solicitor,  whose  business  it  became  to 
impress  him  with  the  extent  to  which  he  was  involved  througli 
the  disclosures  which  had  taken  place,  and  advising  him 
to  adopt  every  precaution  which  regard  for  his  own  safety  might 
suggest.  He  is  further  charged  by  the  legal  advisei  of  Cole, 
and  Davidson  and  Gordon,  of  having  been  aware  of  his  acts  in 
connection  with  the  warrants  that  had  been  used  for  fraudu- 
lent purposes ;  and,  as  respects  his  signature  for  Paris  and  Co., 
he  was  informed  that  should  he  return  he  would  undoubtedly 
be  arrested  for  forgery.  This  was  on  the  22nd  of  July  ;  on  the 
28th,  he  is  advised  that  a  charge  of  conspiracy  was  to  be 
attempted  to  be  made  out  against  him  respecting  business 
at  the  wharf.  Although  Cole  had  held  the  lease,  and  obtained 
the  control  of  Hagen's  Wharf  so  long  as  the  warrants  were 
current,  there  was  now  every  respect  paid  by  his  solicitor  to 
Maltby's  authority,  so  far  as  verbal  recognition  went,  the 
endeavour  being  made  to  obtain  from  him  direct  instruc- 
tions as  to  the  disposal  of  what  remained  on  the  wharf, 
involving  particulars  as  to  its  sale,  and  the  remittance  of  the 
proceeds.  Though  £20  was  forwarded  to  Maltby  on  account 
of  the  "  sales,"  he  refused  to  give  the  full  authority,  which  in 
effect  would  have  committed  him,  though  the  solicitor  was  so 
far  successful  as  to  obtain  a  conditional  order  for  the  delivery 


TACTS,   FAILUUES,   AND  FBArDS.  185 

of  the  keys.  Advised  to  shift  his  locality,  he  yet  perseveringly 
remained  at  Ostend,  defying  the  approaches  of  an  oflScer  who 
had  been  sent  to  arrest  him  by  means  of  the  friendly  agency 
of  the  police.  Finally,  on  the  8th  of  September,  came  a  royal 
decree  of  expulsiin.  Forewarned  of  it,  he  embarked  secretly 
for  England,  and  went  to  Brentwood,  whither  he  was  traced, 
and  arrested  on  the  22nd  of  November.  Mrs.  Maltby,  who 
was  walking  out  with  her  husband  at  the  time,  was  the  first  to 
recognize  the  agent  of  the  law,  exclaiming,  "  Oh,  dear !  this  is 
the  gentleman  we  used  to  see  at  Ostend."  Oa  hearing  the 
warrant  read,  Maltby  made  inquiries  respecting  Davidson  and 
Gordon,  observing,  with  great  emphasis,  that  their  arrest  was 
worth  that  of  a  hundred  Coles.  After  a  brief  examination  at 
the  Mansion  House,  when  very  little  additional  information 
Avas  elicited,  Maltby  was  committed  for  trial.  From  his  arrest 
a  great  deal  was  expected.  His  ominous  allusion  to  the  com- 
plicity of  other  parties,  the  opinion  entertained  that  he  would 
eventually  have  made  most  important  revelations,  induced 
those  who  were  interested  to  look  forward  to  his  appearance 
at  the  Central  Criminal  Court  with  great  anxiety ;  but,  unfor- 
tunately, they  were  doomed  to  be  disappointed,  for  the  "shades 
of  the  prison-house"  speedily  closed  on  his  obscure  but  not 
uneventful  life.  On  the  30th  of  November,  he  was  found 
dead  in  his  cell. 

At  first  the  surmise  gained  ground  that  he  had  accom- 
plished suicide,  but  for  this  there  is  no  good  cause  of  belief. 
It  is  stated  that  he  was  naturally  apprehensive  and  ner\'ous, 
and  the  large  share  of  responsibility  thrust  upon  him,  with  the 
treatment  he  received  from  Cole  and  his  advisers,  no  doubt 
prostrated  his  system,  and  led  to  death  from  disease  of  the 
heart.  This  was  the  close  of  the  second  act  in  this  fearful 
drama  of  mercantile  knavery  and  fraud. 

The  first  had  terminated  just  previously  by  the  conviction 
of  Cole,  who,  between  July  and  the  end  of  October,  had 


ISO  TACTS,   FAILUEES,   Xyj)   rEAITDS. 

passed  through  the  ordeal  of  successive  examinations  oefore 
the  magistrates,  and  had  been  finally  tried  and  sentenced. 
The  endeavour  was  evidently  to  keep  Maltby  out  of  the  way, 
and  in  this  the  clever  professional  advisers  for  the  defence  had 
succeeded ;  but  the  chief  delinquent  having  now  suffered,  the 
coTirse  of  proceeding  as  respected  poor  Maltby  little  mattered, 
except  as  far  as  the  vindication  of  justice  was  concerned, 
though  he  eventually  escaped  the  misery  of  public  prose- 
cution and  the  ignominy  of  his  fate  through  premature  disso- 
lution. The  arrest  of  Cole  took  place  on  the  20th  of  July,  on 
the  charge  of  having  uttered  false  warrants  for  spelter  and 
tin,  and  his  trial  in  the  Central  Court,  October  25, 1854,  on 
the  general  counts  of  representing,  with  the  view  to  obtain 
money,  that  he  had  disposable  power  over  goods  of  which  he 
had  no  control,  and  of  having  uttered  and  disposed  of  invalid 
dock-warrants  with  fraudulent  intentions,  as  well  as  having 
been  party  to  a  conspiracy  to  the  same  end.  The  charge  of 
conspiracy  feU  to  the  ground ;  and  such  had  been  the  caution 
of  Cole,  that,  but  for  a  suggestion  of  Chief  Baron  Pollock, 
when  the  evidence  was  formally  closed,  it  would  not  have  been 
discovered  that  Cole  had  used  the  warrants  issued  by  Messrs. 
Groves  and  Sons  simultaneously  with  what  were  virtually 
duplicates  for  the  same  goods,  namely,  the  warrants  signed  by 
Maltby;  and  the  entire  charge  would,  almost  of  necessity, 
have  fallen  to  the  ground.  Cole  was  accordingly  found  guilty, 
and  sentenced  to  four  years'  penal  servitude. 

But  while  these  proceedings  were  occurring,  Messrs.  Da- 
vidson and  Gordon,  having  reached  the  Continent,  were  plea- 
santly enjoyirig  themselves,  expending  a  large  sum  which  they 
had  appropriated  from  their  assets  before  they  left  Loudon ; 
and  although  active  endeavours  had  been  used  to  secure  them, 
every  effort  failed  until  Mr.  Beard,  a  personal  creditor,  deter- 
mined to  take  the  matter  into  his  own  hands. 

Their  departure  to  Switzerland,  their  pleasant  retreat  with 


FACTS,  FAILUEES,  AITD  FEATIDS.  187 

Madame  Fornachon  at  Neufcliatel,  their  pursuit  through  several 
canton?,  and  final  departure  for  Naples,  where  they  vrere 
arrested,  their  release  on  the  2nd  of  April  (1855)  by  the  magis- 
trate at  Yaletta,  the  police  surveillance  exercised  over  them, 
their  subsequent  embarkation  for  England,  if  narrated  in 
detail,  would  constitute  an  interesting  contribution  to  foreign 
travels ;  but  it  has  already,  in  a  great  degree,  been  dealt  with 
by  Mr.  Seton  Laing,  in  his  elaborate  pamphlets. 

On  their  compulsory  return  to  England,  after  being  in- 
dicted and  found  guilty,  on  the  23rd  of  August,  1855,  of  fraud 
and  embezzlement,  an  indictment  which  was  quashed  on  tech- 
nical grounds,  Davidson  and  Gordon  made  their  appearance 
again  in  court  on  the  19th  of  September,  to  answer  to  the 
charge  of  having  embezzled  and  secreted  a  portion  of  the 
estate  in  bankruptcy,  and  were  again  acquitted  ;  a  final  con- 
viction, on  the  19th  of  December,  however,  on  the  charge  of 
obtaining  goods  under  false  pretences,  was  obtained  agamst 
them,  and  being  found  guilty,  they  were  sentenced,  some  think 
inadequately,  to  two  years'  imprisonment. 

Some  small  reparation  was  offered  for  the  deep  injuries 
which  not  only  private  individuals,  but  business  commonly, 
had  suffered  in  the  refusal  of  the  claim  of  ^Messrs.  Overend, 
Gumey,  and  Co.,  for  the  balance  of  their  account,  amounting 
to  £120,000,  out  of  the  assets  of  the  estate  of  Cole ;  and  the 
exposure  of  the  conduct  of  the  partner  of  Messrs.  Overend, 
Gumey,  and  Co.,  ^Ir.  David  Barclay  Chapman,  who  managed 
these  transactions,  in  having  concealed  for  several  months  the 
knowledge  of  the  circulation  of  these  fraudulent  warrants, 
elicited  the  severe  reprehension  of  nearly  all  classes  associated 
with  the  mercantile  community.* 

The  attention  which  the  exposure  of  dock-warrant  frauds 
has  drawn  to  the  existing  means  for  testing  the  validity  of 

•  For  the  detail  of  the  various  transactions  vule  the  report  of  Messrs. 
Quiltcr,  BaU,  and  Co. 


1S8  TACTS,   FAILUEES,   A^'D   TEAUDS. 

such  documents — means  only  available  at  au  cxpenditiire  of 
time,  money,  and  labour  ■\vhicli  no  large  operator  would  care 
to  incur,  and  involving  a  delay  in  the  transfer  to  which  no 
merchant,  broker,  or  banker  would  submit — will  doubtless 
lead  to  alterations  in  the  present  mode  of  issue,  by  which 
safety  will  be  more  properly  assured  to  commerce.  It  is 
quite  evident  that,  although  confidence  is  essential  in  the  pro- 
gress of  large  mercantile  operations,  and  that  the  business  of 
this  or  any  other  great  metropolis  could  not  be  transacted 
without  it,  additional  checks  are  required  to  prevent  the  recur- 
rence of  any  such  mischief,  which  has  had  no  parallel  in  mer- 
cantile annals  since  the  days  of  the  great  Exchequer  Bill 
forgeries. 

To  Mr.  Seton  Laing,  of  Messrs.  Laing  and  Campbell,  of 
London,  in  the  first  place,  and  to  Mr.  Beard,  of  Messrs. 
Beard  Brothers,  of  Manchester,  in  the  second  place,  must 
be  attributed  the  praise  of  having  exposed  and  brought  the 
whole  of  these  delinquents  to  justice ;  and  notwithstanding  it 
may  be  asserted  that  one  was  actuated  by  the  desire  to  trace 
the  conspiracy,  even  to  the  inculpation  of  Messrs.  Overend, 
Gurney,  and  Co.,  and  the  other  with  the  object  of  recovering 
part  of  the  proceeds  which  the  fugitives  secreted,  they  efiected 
eminent  services  to  the  general  community  in  breaking  up  and 
disbanding  such  a  horde  of  dangerous  criminals,  and  finally 
placing  their  conduct  in  the  proper  light  before  the  public. 
Mr.  Laiug  was  certainly  most  persevering  in  his  eflbrts  to 
institute  and  successfully  carry  out  proceedings  against  Joseph 
Windle  Cole,  and,  despite  the  endeavours  to  shield  the  latter 
from  the  consequences  of  his  acts,  so  that  other  and  more 
responsible  parties  might  escape  the  peril  of  their  situation, 
compromised  as  it  had  been  by  preceding  events,  he  not  only 
obtained  his  conviction,  but  also  brought  to  view  those  cir- 
cumstances which,  connected  with  Messrs.  Overend,  Gurney, 
and  Co.,  created  for  a  time  a  strong  feeling  against  the  firm, 


TACTS,   FAILUKES,    ATfD  FRAT7DS.  ISO 

but  more  particularly  Mr.  David  Barclay  Chapman.  If  tho 
exertions  of  ^Ir.  Beard  were  not  exactly  directed  to  the  disso- 
lution of  tho  alleged  conspiracy,  he  afforded  essential  benefit 
by  the  steps  he  adopted  to  render  Davidson  and  Gordon's 
position  on  the  Continent  insecure,  and  thus,  either  compul- 
sorily  or  willingly,  hasten  their  return  to  England.  This  ho 
effected,  though  not  without  great  trouble ;  but  the  end,  as 
has  akeady  been  shown,  was  accomplished,  and  the  culprits 
were  subjected  to  their  well-merited  punishment.  "Whatever 
may  have  been  the  character  or  extent  of  the  publicity  which 
these  separate  cases  received  at  the  respective  periods  they 
were  investigated,  it  was  not  in  the  least  disproportioned  to 
the  principles  of  commercial  rectitude  and  financial  integrity 
which  they  involved.  The  estates,  as  administered  in  bank- 
ruptcy, have  not  yet  been  finally  wound  up,  and  many  claims 
still  remain  for  settlement  and  ultimate  arrangement. 


THE  ESTATE  OF  COLE  IN  BANKRUPTCY. 

The  following  is  tho  report  of  tho  Accountants  on  the  transactions 
between  Messrs.  Quilter  and  Ball,  Messrs.  Overend,  Gurney,  and  Co.,  and 
tho  Bankrupt,  dated  November  21, 1855  : — 

B(?  JosEPU  WiNDLE  Cole,  a  Bankrupt. 

To  "William  Murray,  Esq.,  Solicitor  to  the  Assignees  of  J.  W.  Cole. 
57,  Coleman  Street,  November  21,  1S55. 

Sm, — In  accordance  with  the  wish  of  tho  assignees,  we  proceed  to  sub- 
mit to  you  the  result  of  the  examination  wo  have  been  making  into  tho 
accounts  filed  by  tho  bankrupts,  so  far  as  it  has  applied  to  the  dealings  and 
transactions  between  him  and  Messrs.  Overend,  Gurney,  and  Co.,  to  which 
matter  tho  present  report  is  confined.  "Wo  do  not  propose  to  describe  in 
detail  the  process  of  our  investigation,  but  simply  to  state  the  conclusions 
to  which  it  has  led  us,  accompanied  by  such  explanations  as  may  appear 
necessary,  premising,  however,  that  tho  period  over  which  our  exi-miuation 
has  extended  is  that  comprised  between  tho  18th  of  October,  1851,  and  tho 
termination  of  tho  account  on  tho  31st  of  December,  1851,  embracing 
transactions  by  way  of  cash  advances  to  the  bankrupt  and  repayments 
thereof,  to  tho  total  amount  of  £G80,000,  or  thereabouts. 

It  will  be  useful  to  bear  in  mind  tho  following  dates  as  representing 
epochs  in  the  Bankrupt's  affairs  : — 


100 


FACTS,   PAILTJEES,   AiS^D   FEAUDS. 


13tli  October,  1853. — About  tbis  date  tbe  disclosure  iivas  made  by  tlie 
bankrupts  to  Messrs,  Overend,  Gurney,  and  Co.,  of  the  fictitious 
character  of  the  securities  held  by  them  in  the  form  of  waiTauts  pur- 
porting to  represent  Spelter,  Tin,  Copper,  and  other  description  of 
property  at  Hagen's  wharf. 

27th  June,  1854. — Cole  stopped  payment. 

19th  August,  1854. — Cole  became  bankrupt. 

There  are  no  particular  transactions  requiring  special  remark  of  prior 
date  to  the  5th  of  October,  1853,  but  it  will  be  well  to  indicate  what  was  the 
general  character  and  course  of  the  account  up  to  that  date,  at  which  point 
the  sale  of  securities  by  Messrs.  Ovei-end,  Gurney,  and  Co.,  on  account  of 
the  bankrupt,  appears  to  have  commenced. 

Thus,  prior  and  up  to  the  5th  of  October,  1853,  it  appears  that  the 
bankrupt  was  in  the  habit  of  obtaining  loans  on  the  deposit  of  securities, 
occasionally  redeeming  portions  of  such  securities  by  partial  repayments  of 
the  cash  advances  ;  the  transactions  went  on,  gradually  increasing  the  cash 
balance  against  the  bankrupt  up  to  September,  1 852,  when  it  reached  the 
sum  of  £252,240,  from  which  date  it  became  gradually  diminished  until  the 
5th  of  October,  1853,  when  it  stood  at  the  sum  of  £195,655.  The  follow- 
ing list  of  the  monthly  balances  in  favour  of  Messrs.  Overend  and  Co.,  up 
to  that  date,  corroborates  this  statement. 

Balance  of  advances  in  favour  of  Messrs.  Overend,  Gumcy,  and  Co.,  at 
the  close  of  the  several  months  indicated,  thus  : — 


1851. 

£ 

1852. 

£ 

October 

16,070 

ISTovember    . 

246,990 

K'ovember 

39,490 

December     . 

247,000 

December 

86,350 

1S53. 

1852. 

January 

2^3,500 

January 

106,050 

Pebruary 

2;<  9,800 

^February 

.      114,790 

March  . 

229,580 

March 

,      128,910 

April 

218,210 

April 

,      153,520 

May 

211,310 

May 

,       20G.680 

June 

216,255 

June       . 

•  236,980 

July 

200,?  55 

July 

234,320 

August    . 

195,655 

August  . 

237.220 

September 

195,655 

September 

252,240* 

October  (5th) 

195,655 

October 

246,990 

The  accounts  current,  rendered  by  Messrs.  Overend,  Gurney,  and  Co., 
indicate  the  foregoing  balances,  as  will  be  seen  on  reference  to  the  accom- 
panying copy  thereof,  marked  "  A." 

Against  this  balance  of  £195,655,  the  securities  held  by  Messrs. 
Overend,  Gurney,  &  Co.,  both  genuine  and  fictitious,  amounted  to  the  nomi- 
nal sum  of  £323,230,  or  thereabouts,  according  to  the  following  statement : — 

*  The  total  advances  to  this  date  amounted  to  £266,030;  and  the 
repayment^  to  £13,790;  total,  £252,240. 


TACTS,  FAILTJIIES,  AlfD    FEArDS. 


191 


Abstbact  of  Securities  in  hands  of  Messrs.  Overend,  Ourney  and  Co., 
Sill  October,  1853. 


Genuine. 

Fictitious. 

Deseriptioa. 

Quantity. 

Amount. 

Quantity. 

Nominal  amonnt 
(about) 

£       s. 

d. 

£       s.   d. 

Copper  Sheets 
Copper  Tiles  - 

23  tons  ■) 
20   „     ) 

4,365    8 

1 

(  581  tons  ") 
■J  sheets  &    ■ 
L     tiles      , 

79,597    0    0 

Tin  -    -    -    - 

214   „ 

24,143     4 

3 

775  tons 

90,675    0    0 

Tin  Plates  -     - 

500  boxes 

607  17 

6 

Tin  Plates  -     ■ 

205  cases 

1,125    0 

0 

9,200  boxes 

12,420    0    0 

Tin  Plates    ) 
on  hand     J 

50  „ 

250    0 

0 

Spelter  -    -    • 

185  tons 

4,021  10 

0 

2,288  tons 

48,048    0    0 

Pig  Lead   -     - 

153   „ 

3,019  10 

7 

1,250    „ 

30,000    0    0 

Swedishlron") 
and  Steel  > 

41   „ 

732  10 

0 

231    „ 

3,927    0    0 

Cochineal  -     - 

181  bags 

5,198  17  10 

114  bags 

4,425    0    0 

Iron-     -     -     - 

5,119    4 

7 

Eico  &  Coffeo 

»       » 

5,525    9 

1 

269,092    0    0 

£54,138  11  11 

Total   -  £ 

54,138  11  11 

323,230  11  11 

The  above  figures  are  deduced  from  particulars  furnislied  by  Messrs. 
Overend,  Gumey,  and  Co. ;  the  amount  of  the  Genuine  securities  being 
that  realized,  except  in  the  instance  of  the  item  of  Tin  Plates,  50  cases  of 
which  are  stated  to  bo  "  on  hand,"  estimated  at  £250,  and  the  amount  of 
the  Fictitious  securities  being  calculated  upon  the  supposed  value  of  the 
property  in  April,  1853,  when  the  loans  then  outstanding  \Ycre  renewed : 
the  statement  may  bo  subject  to  some  immaterial  modifications  arising  from 
some  trilling  inexactness  in  respect  of  quantities,  but  it  may  be  regarded 
as  substantially  correct ;  so  that  had  the  whole  of  the  securities  then  held 
by  them  been  genuine,  the  balance  due  to  Messrs.  Overend,  Gumey,  and 
Co.,  on  the  5th  of  October,  1853,  would  have  been  more  than  covered, 
to  the  extent  of  the  difference  between  £195,655  and  £323,230,  namely, 
£127,575. 

Such  was  the  ostensible  position  of  the  account  when  Messrs.  Overend, 
Gurncy,  and  Co.  began  the  realization  of  the  securities  in  their  hands  on 
the  5th  of  October,  which  ultimately  produced  the  actual  sum  of 
£54,138  11j.  llrf.  in  reduction  of  the  balance  of  £195,655,  leaving  them 
Creditors  (ex  Interest  from  the  previous  30th  of  June),  in  the  sum 
£141,510  Ss.  Id.,  and  such  would  have  been  the  final  state  of  the  account 


102  FACTS,   FAILUEES,    A^D   FEAUDS. 

had  the  transaction  which  occurred  Kubsequcntly  to  the  5th  of  October, 
1853,  been  confined  to  the  sale  and  rcahzation  of  those  securities ;  but 
such  was  not  the  case,  as  we  find,  from  an  entry  in  the  Bankrupt's  cheque- 
book, that  on  the  18th  of  Kovember,  1853,  Messrs.  Overend,  Gurney,  and 
Co.  received  from  him  "  Davidson  and  Gordon's  Promissory  Note  for 
£120,000,  payable  on  demand,  with  interest  at  5  per  cent,  per  annum,  from 
the  27th  of  October,  1853,  as  further  collateral  security  for  their  advances." 
And  wo  moreover  find,  that  further  advances  of  cash  by  Messrs.  Ovcrcnd, 
Gurney,  and  Co.,  and  further  deposits  of  securities  by  the  Bankrupt, 
amounting  in  the  whole  to  a  very  considerable  sum,  took  place  subsequently 
to  the  5th  of  October,  1853,  with  this  result : — 

Istly. — As  to  the  Promissory  Note  of  Davidson  and  Gordon ;    the 
amount  thereof  was  passed  to  the  credit  of  the  Bankrupt,  under 
date  31st  of  December,  1853,  but  not  being  paid,  such  credit  becomes 
nugatory,  and  the  transaction  therefore  produces  no  cfiect  on  the 
balance  of  the  account. 
2ndly. — As  to  the  other  transactions  of  dates  subsequent  to  the  5th  of 
October,   the  effect   of  them  upon  the  account  is  to  reduce  the 
balance  duo  by  the  Bankrupt  from  the  before-mentioned  sum  of 
£141,51G  8s.  Id.,  to  £122,433  Us.  lOd.,  the  difference  between 
these  two  sums,  viz.  £19,082  13s.  3d.,  representing  the  extent  of 
the  benefit  accruing  to  Messrs.  Overend,  Gurney,  and  Co.,  by  the  . 
continuation  of  their  dealings  with  the  Bankrupt  subsequent  to  the 
5th  of  October,  1853  ;  subject  nevertheless  to  the  amount  of  interest 
that  would  bo  applicable  to  the  transactions  originating  after  that 
date,  that  is,  from  the  respective  dates  of  the  several  advances, 
to  the  time  when  the   securities    deposited  against    them   were 
realized. 
This  statement  of  results  will  be  rendered  more  clear  on  a  consideration 
of  the  following  figures,  which  are  intended  to  represent  in  a  summary  form  . 
the  facts  above  described.    Thus  : 

J.  W.  Cole,  >  Dr. 

To  balance  of  final  account  rendered  by  Messrs.  Overend, 
Gurney,  and  Co.,  after  crediting  him  with  the 
amount  of    Davidson  and  Gordon's  Promissory 

Note  for  £120,000 £3,530    0  10 

To  amounts  of  such  Note  unpaid  .  .  .       120,000    0    0 

£126,530    0  10 
Subject  to  the  value  of  50  Cases  of  Tin  plates  on  hand, 

estimated  at.  .  .  .  "  •  250    0    0 


Balance  provable  by  Messrs.  Overend  and  Co.,  inclusive 
of  tlie  effect  on  the  account  of  the  transactions  sub- 
sequent to  the  5th  of  Ociober,  1853  .  .    £120,280    0  10 


FACTS,    FAILUBES,   AND    FBAUDS.  193 

To  Baloncc  (ex  interest  from  30th  June)  duo  to  Messrs. 
Ovei-cmi,  Gurney,  nnd  Co.,  on  5th  October,  1853, 
after  civditing  the  value  of  the  genuine  securities  as 
ascertained  by  subsequent  realization  .  .     £141,516     8     1 

To  Interest  on  the  account  from  30th  Juno  to  31st  De- 
cember, 1853,  as  charged  by  Messrs,  Overend,  Gur- 
ney, and  Co.  3,81G    6    0 

Balance  brought  forward  due  by  the  Bankrupt,  exclusive 
of  the  effect  of  transactions  since  5th  October,  1853, 
except  uig  oidy  to  the  extent  of  the  Interest  appli- 
cable to  them,  comprised  in  the  above  sum  of 
£3ai6  6*.    .  .  .  .  .  .       145,362  14    1 


To  Cash  and  Spelter  provided  by  Messrs.  Overend  and 
Co.  to  assist  the  Bankrupt  to  deliver  400  tons  of 
Spelter  wliich  had  been  sold  by  them  on  fictitious 
warrants,  previously  to  their  discovery  of  the  spu- 
rious quality  of  those  documents     .  .  .  4,630    3     5 

By  proceedbs  of  the  above  400  tons  of  Spelter,  passed  to 
the  credit  of  the  Bankrupt's  account  by  Messrs. 
Overend,  Gurney,  and  Co.  ...  8,331    6    7 

Differen?e       .  .  .         £3,701    3    2 


Cr.  £3701    8     2    Dr.  £145,362  14    1 
To  amount  of  advances  made  subse- 
quently to  the  5th   of   October, 

1853  .        .        71,620    0    0 

By  amount  realized  by  securities  lodged 

against  the  same        87,001  10    1 

Difference         .        .       -—15,381  10    1 

Total  surplus  in  respect  of  securities 

deposited  nnd  realized  since  5Hi  of 

October,  1853,  in  diminution  of  the 

balance  duo  by  the  Bankrupt  to 

Messrs.  Overend,  Gurney,  and  Co., 

at  that  date 19,082  13    3 


Balance  according  to  the  final  account  rendered  by 
Messrs.  Overend,  Gurney,  and  Co.,  as  previously 
stated £126,280    0  10 

We  now  proceed  to  explain  more  particularly  the  character  of  the 
transactions,  occurring  since  the  5th  October,  1853,  as  developed  by  our 
investigation. 

It  will  be  observed  that  the  sum  of  £19,082  13*.  3d.  is  classed  undoi 
two  beads,  viz. : — 

Result  of  transactions  arising  out  of  sale  of  400  tons  of 

Spelter 3,701     3    2 

Bcsult  of  sundry  other  transactions        .  .  .         15,381  10    1 

£19,082  13     3 


194  FACTS,    FAILUEES,    AND    TBArDS. 

As  to  tlie  Sale  of  the  400  Tons  of  Spelter. 

In  the  "  Spelter  account"  furnished  by  Messrs.  Overend,  Gm-ney,  and 
Co.,  which  purports  to  set  forth  the  receipts  and  dehveries  of  that  article 
by  them  in  account  with  the  Banirupt,  the  following  items  of  sale  occur 
to  the  credit  of  the  latter ;  it  has,  however,  been  stated  to  us  that  the 
warrants  purporting  to  represent  this  property  were  used  by  Messrs.  Over- 
end,  Grurney,  and  Co.,  for  Davidson  and  Gordon,  on  whose  accounts  the 
sales  were  originally  effected,  but  were  afterwards  adopted  by  the 
Bankrupt. 

1853. 
October    5— By  proceeds  200  Tons  .  .  .    £4233    8  10 

„        11— Bv         „        100    „  ...       2052     7     3 

„        "         „        100    „  ...       2045  10    6 


400  £8331    6    7 

After  these  sales  had  been  effected,  and  the  warrants  purportuig  to 
represent  the  property  at  Hagen's  Wliarf,  handed  to  the  broker,  Messrs. 
Overend,  Gumey,  and  Co.  discovered  the  fitiudulent  nature  of  those  docu- 
ments, and  that  in  fact  no  Spelter  existed  to  meet  them.  Under  these 
circumstances,  Messrs.  Overend,  Gurney,  and  Co.  arranged  with  the 
Bankrupt,  that  they  would  assist  in  providing  liim  with  the  means  where- 
with to  procui'e  the  Spelter  to  answer  to  the  waiTants,  and  so  to  secure 
dehvery  being  made  in  accordance  with  the  sale  which  had  been  effected. 

The  following  advances  were  made  by  Messrs.  Overend,  Gumey,  and 
Co.,  in  pursuance  of  tlois  arrangement : — 

1853. 
Ifovember    1.— To  Cash  on  68  Tons  Spelter* 


4.— 

19.— 

December    5. — 

5> 

3> 

50 
20 

80 

1854. 

February     4. — 

3> 

5J 

50 

£927 

3 

5 

700 

0 

0 

300 

0 

0 

1200 

0 

0 

„      „        cost     .    £1225 
Less. 
Cash  paid  to  Overend,  Gumey,  and  Co.,  same  day 

by  the  Bankmpt  ....        475 

Febmary  10.— To  Cash  50  Tons  Spelter,  cost  .    £1228 


Cash  paid  to  Overend,  Gumey,  and  Co.,  same  day 

by  the  Bankrupt  ....        475 


750    0    0 


753    0    0 


318  Tons  £4630    3     5 


*  In  reference  to  this  item  we  find,  from  the  "  discount  account"  be- 
tween Overend,  Gumey,  and  Co.  and  the  bankrupt,  that  it  was  not  an 
actual  advance  of  cash,  but  the  balance  of  an  over-due  bill  in  their  hands 
for  £2500  on  Hudson,  wliich  balance  is  stated  in  the  discount  account  to 
be  "  against  68  tons  of  Spelter  given  up." 


FACTS,   FAILURES,   AWD   FBAITDS.  195 

It  would  appear,  therefore,  from  the  above  data,  that  the  318  Tons  of 
Spelter  were  provided  towards  effecting  the  delivery  of  the  400  Tons  sold 
on  false  warrants,  by  which  delivery  the  credit  to  the  Bankrupt'a  account 
of  the  amount  of  such  sale,  namely,  £8331  6*.  Id.,  was  established  at  the 
expense  of  an  outlay  on  the  part  of  Messrs.  Overend,  Gumey,  and  Co.  of 
£4G30  3.y.  Zd.  From  what  source  the  remaining  82  Tons  of  Spelter  were 
procured,  in  order  to  make  up  the  full  quantity  of  400  Tons,  wo  have  not 
ascertained. 

As  to  transactions  since  5th  October,  1853,  other  than  those  relating  to 
the  400  Tons  of  Spelter. 

These  may  be  classed  under  the  heads  of  Copper,  Tin,  Spelter,  Coffee, 
and  CochmeaL 

Firstly. —  Copper  Warrants. 
Securities  of  this  character  were  deposited  between  25th 
May,  and  3rd  June,  1854,  which  realized  at  various 
subsequent  dat«3  the  sum  of  .  .  .       £16,085  12     1 

The  advances  made  in  respect  to  these  securities  amount- 
ed to  .  .  .  .  .  .         12,850    0    0 

Surplus 3,235  12    1 

Secondly. — Tin  Warrants. 

Amount  realized  from  warrants  de- 
posited on  the  14th  and  27th  May, 
1854  ....     £7,418    4    7 

Amount  of  advances  made  in  respect  of 

such  warrants         .  .  .       6,040    0    0 


Surplus 1,378    4    7 

Thirdly. —  Spelter  Warrants. 

Amount  realized  from  warrants  de- 
posited between  October  19th, 
1853,  and  Juno  6th,  1854 .  .   £42,539  16    4 

Amount  of  advancoa  made  in  respect  of 

such  warrants        .  .  .     35,730    0    0 


Surplus  .......  6,809  16    4 

Fourthly. — Cochineal  and  Coffee. 

Amount  realized  from  warrants  trans- 
ferred to  Messrs.  Overend  and  Co. 
by  Sargant  and  Co.,  28th  Feb.  1854  £20,957  17    1 

Amount  of  advance  in  respect  of  such 

warrants    ....      17,000    0    0 


Surplus 3,957  17    1 

Total  Surplus  under  the  above  heads    .  .  .      JB15,381  10    1 

The  accompanying  Statement,  marked  "  j5,"  aete  fortli,  in  detail,  the 


196 


FACTS,   FATLTJIIES,   A>'D   FRAUDS. 


particulars  of  tlie  foi'egoing  transactions  as  classed  under  tlie  respective 
heads  of  Copper,  Tin,  Spelter,  Cochineal,  and  Coffee. 

The  following  is  a  summary,  in  a  tabulai'  form,  of  the  entire  transac- 
tions originating  since  5th  October,  1853 :  — ■ 


Description  of  Goods. 

Amount  of 
Advances. 

Amount  realized. 

Surplus  operating 

in  reduction  of 

Balance  due  by 

the  Banlcrupt  to 

Overend  and  Co. 

Spelter  (400  tons)      - 

Coijper      .         -         - 

Tin  - 

Spelter 

Cochineal  and  Coffee 

Total  - 

£        s.   d. 

4,630  3  5 
12,850     0     0 

6,040  0  0 
35,730  0  0 
17,000     0     0 

£       s.    d. 

8,331     6     7 

16,085  12     1 

7,418    4    7 
42,539  16    4 
20,957  17     1 

£       s.    d. 
3,701    3     2 
3,235  12     1 
1,378    4    7 
6,809  16    4 
3,957  17     1 

£76,250    3     5 

£95,332  16    8  j  £19,082  13     3 

Included  under  the  head  of  Spelter,  the  following  item  of  advance  occurs 
to  the  debit  of  the  Bankrupt :  — 


Feb.  4,  1854.     To  Cash  185  tons  Spelter 


£3,960 


The  wan-ants  for  this  Spelter  formed  part  of  a  batch  purporting  to 
represent,  in  the  whole,  567  tons  of  that  metal,  and  some  32  tons  of  Copper, 
deposited  by  the  Bankrupt  with  Messrs.  W.  Short  and  Co.  as  security  for 
a  loan  of  £10,500,  granted  to  him  by  that  finu,  who,  however,  appear  to 
have  obtained  the  money  for  that  purpose  from  Messrs.  Overend,  Gurney, 
and  Co.,  on  deposit  with  them  of  the  same  secvu'ities,  the  whole  of  which, 
with  the  exception  of  those  representing  the  185  tons  Spelter,  were  known. 
to  be  fictitious.  The  loan,  as  between  Messrs.  Short  and  Co.,  and  Overend, 
Gumey,  and  Co.,  was  settled  in  terms  of  some  order  given  on  the  latter  by 
the  former,  dated  28th  Januaiy,  1854,  the  effect  of  the  arrangement  between 
those  parties  being  that  the  amount  of  the  loan  and  interest,  £10,803  9*.  lOd., 
was  transferred  on  the  3rd  of  February,  1854,  by  Messrs.  Overend,  Gumey, 
and  Co.  to  the  debit  of  the  Bankrupt,  who  appears  to  have  satisfied  it  in 
the  manner  indicated  in  the  following  account  furnished  us  by  Messrs. 
Overend,  Gumey,  and  Co.  in  reply  to  our  inquiries  about  the  matter :  — 


2     3 


(Copy) 

1853 

12  30  Cash  - 

1854 

Interest  on ' 
ditto  at 
per  cent. 
Discount  ■) 
on  ditto  at  > 
5  percent.^ 
W.  Short  \ 
and  Co.     ) 


Cole  Brothers. 


2nd  Month,  3rd,  1854. 


£ 

4,000 


on") 


19    3    7 


113    1    7 


10,803    9  10 


£14,935  15    0 


1854 

1  11  BUI     on     ^ 

Hudson,  ' 
due  27th  ^ 
April      -  J 

2  3  Advance     ■\ 

on  185  f 
tons  of  t 
Spelter  - ) 
Bank  and ) 
Money    - ) 


£ 


s.    d. 


9,950    0    0 


3,960    0    0 


1,023  15    0 


£14,935  15    0 


TACTS,   rAILUEES,   AND   FHAUDS.  197 

By  this  arrangement,  Slessrs.  Overend  and  Co.,  assuming  tlio  bill  on 
Hudson  to  be  paid,  appear  to  have  secured  to  themselves  the  difference 
between  the  value  of  the  good  securities  taken  over  by  them  from  Short 
and  Co.,  and  their  advance  of  £3,960,  and  the  debts  wliich  they  transferred 
from  Short  and  Co.  to  the  debit  of  Cole,  £10,803  9s.  lOd. ;  and  by  the 
same  operation  to  have  avoided  the  necessity  of  an  exposure  by  Cole  to 
\V.  Short  and  Co.  of  the  real  quality  of  the  securities  on  which  they  had 
granted  him  the  loan  of  £10,500. 

The  question  inevitably  suggested  by  a  consideration  of  the  facts  deve- 
loped by  this  investigation  is — whether  the  benefits  obtained  by  Messrs. 
Overend,  Gumey,  and  Co.  in  the  way  of  a  reduction  of  the  debt  due  to 
them  by  the  bankrupt,  after  he  had  disclosed  the  frauds  he  had  practised 
upon  them,  arc  to  be  regarded  in  the  light  of  undue  preference,  which  might 
be  recovered  by  the  assignees  of  the  bankrupt  ?  But  upon  this,  as  upon 
any  other  legal  aspect  which  the  case  may  present,  we  offer  no  opinion. 

Messrs.  Overend,  Gumey,  and  Co.  have  facilitated  the  inquiry  by 
promptly  rendering  explanations  upon  all  the  points  arising  duripg  the 
progress  of  the  investigation,  on  which  it  has  been  necessary  to  apply  to 
them  for  information. 

We  remain,  Sir,  yours  faitlifuUy,        Quilteb,  Ball,  and  Co. 


TRIAL  OP  JOSErn  WINDLE  COLE. 

Central  Ceiminal  Couet,  Oct.  25, 1854. 

(Before  LonD  Chief  Baeon  Pollock  and  Me.  Jvsticb  Maule). 

Joseph  Windle  Cole,  whose  case  was  adjourned  from  last  session  on  the 
ground  of  the  absence  of  several  important  witnesses,  was  placed  at  the  bar 
for  trial  upon  serious  charges  of  fraud.  Mr.  Bodkin  and  Mr.  Giffard 
appeared  for  the  prosecution.  The  defence  was  conducted  by  Mr.  Edwin 
James,  )Ir.  Clarkson,  and  Mr.  Ballaaline. 

Mr.  BoBEiN,  for  the  prosecution,  opened  the  proceedings  by  observing 
that  the  prisoner  was  charged  with  fraud,  under  circumstances  which  im- 
parted to  the  case  an  universal  degree  of  interest  in  a  commercial  commu- 
nity, where  so  much  depended  on  the  faith  and  probity  of  those  who  had 
dealings  with  each  other.  It  was  the  custom  of  foreign  mercliants  who 
imported  goods  into  this  country  to  place  them  at  a  wharf,  where  they 
remained  until  it  was  convenient  to  the  importers  to  take  them  out.  For 
each  parcel  of  goods  so  placed  in  a  wliarf  a  warrant  was  given,  which  cer. 
tified  that  the  wharfinger  was  the  holder.  These  warrants  resembled  bills 
of  exchange,  and  entitled  any  person  to  whom  they  were  endorsed  to  claim 


198  FACTS,   FATLTIEES,   A^H   TEAUDS. 

the  goods  of  wliicli  thej  -were  the  representatives.  It  was,  however,  from 
the  abuse  of  that  system  that  the  present  charge  arose,  and  the  gentlemen 
who  prosecuted  in  the  case  had  been  victimized  by  the  prisoner,  in  con- 
junction with  a  person  named  Maltby,  who  was  indicted  with  him,  but  who 
had  absconded,  and  could  not  now  be  found.  The  system  carried  on  was 
that  of  signing  and  circulating  warrants  for  goods  which  were  purely  ima- 
ginary ;  but  to  accomplish  this,  it  wovdd  of  course  be  necessary  for  the 
person  perpetrating  the  fraud  to  have  an  accomplice  representiug  the 
wharfinger.  Maltby  had  taken  a  wharf  on  the  banks  of  the  Thames  called 
Hagen's  Wharf,  and  this  was  joined  by  a  warehouse  held  by  JVIr.  Groves, 
well  filled  with  goods  such  as  those  in  which  the  prisoner  professed  to  have 
in  store  upon  the  wharf.  The  wharf  was  so  constructed  that  any  person, 
who,  from  curiosity  or  suspicion,  desired  to  see  the  goods  on  which  the 
waiTants  were  issued,  would  see  the  property  of  Mr.  Groves,  and  be  de- 
luded into  the  idea  that  it  was  the  property  of  the  prisoner  and  Maltby. 
The  indictment  charged  the  prisoner  Maltby  with  falsely  representing  to 
Messrs.  Laing  and  Campbell,  tlie  prosecutors  in  this  case,  that  two  war- 
rants which  they  delivered  in  July,  1853,  to  those  persons  upon  an  advance 
of  money,  were  warrants  which  duly  represented  that  Maltby  was  then  in 
possession  of  the  goods  mentioned  in  those  wan-ants,  and  that  Cole  had 
disposable  power  over  those  goods,  and,  by  endorsing  the  warrants  to 
Laing  and  Campbell,  was  in  a  position  to  transfer  those  goods  to  them  on 
the  payment  of  their  warehouse  charges.  On  those  warrants  the  prosecut- 
ors made  advances.  Rumours,  however,  subsequently  reached  them,  which 
induced  them  to  make  some  inquiries  into  the  validity  of  the  documents. 
In  May  of  the  present  year  they  affected  to  have  sold  the  goods,  which  they 
were  entitled  to  do,  and  then  it  was  they  discovered  the  fraud  which  had 
been  practised  upon  them.  He  should  call  evidence  which  would  substan- 
stiate  clearly  the  charge  against  the  prisoner,  and  would  clearly  establish 
against  him  the  commission  of  frauds,  which  had  most  serious  conse- 
quences. 

Mr.  Seton  Laing,  colonial  broker,  carrying  on  business  in  Mincing  Lane, 
in  partnership  with  Mr.  Campbell,  was  the  first  witness  examined.  He 
said,  I  knew  the  prisoner  Cole,  and  about  the  15th  of  July,  1853,  had  some 
communications  with  him  upon  the  subject  of  the  advance  of  money.  The 
securities  were  to  consist  of  warrants  :  we  agreed  to  advance  £30,000  for 
three  months  at  5  per  cent,  per  annum,  and  |  per  cent,  commission.  After 
sending  a  letter  to  that  effect,  I  saw  Cole,  who  told  me  he  agreed  to  take 
the  money  on  the  terms  mentioned  in  the  letter.  The  securities  were  to 
consist  of  spelter,  tin,  and  cochineal — bonded  goods,  upon  which  the  money 
was  to  be  advanced  according  to  their  value.  The  warrant,  of  which  the 
following  is  a  copy,  was  sent,  together  with  a  memorandum  in  the  hand- 
writing of  the  defendant,  to  Mr.  Laing : 


TACTS,  rAILrBES,    ASTD  FBAUD8.  199 

"  Hagen's  Sufferance  Wharf,  St.  Saviojir's  Dock, 
"  London,  Nov.  23,  1852. 
"  Warrant  for  banca  tin,  imported  iu  the  ship  *  Diana,'  from  Rotterdam, 
entered  by  C.  Henbrey ;  deliverable  to  Colo  Brothers  or  their  order,  by 
endorsement  hereon,  on  payment  of  all  charges  and  rent  from  tliis  date, 
1052  slabs,  weighing  32  tons,  9  cwt.,  1  qr.,  and  20  lbs. — No.  378. 

"  Maltbx  and  Co..,  Wharfingers." 

There  was  another  warrant  for  banca  tin,  imported  in  the  ship  "  Pearl," 
from  Amsterdam,  which  was  also  produced  bj'  the  witness. 

A  cheque,  of  which  the  following  is  a  copy,  was  forthwith  transmitted  to 
the  defendant : — 

"No.  52—68,  Lombard  Street,  London.  July  29,  1853.  Messrs. 
Martin  and  Co.,  pay  to  Messrs.  Cole  Brothers,  or  bearer.  Ten  Thousand 
Poimds. 

"  £10,000.  **  LAUra  and  Campbbi.l." 

The  cheque  was  crossed  to  Glyn  and  Co.,  the  bankers  of  the  defendant, 
and  was  paid  in  the  course  of  business  and  returned  to  Messrs.  Laing  and 
Campbell,  and  no  suspicion  whatever  was  entertained  as  to  the  correctness 
of  the  transaction.  Subsequently,  however,  in  consequence  of  information 
received  by  us,  we  applied  to  see  the  goods  mentioned  in  the  warrant,  but 
without  effect.  Mr.  Cole  himself  afterwards  positively  refused  to  show  me 
the  goods.  I  told  Cole  that  ]\Ialtby,  by  his  authority,  had  positively  re- 
fused to  show  me  the  goods.  Cole  only  said  in  reply,  that  one  of  our  clerks 
had  seen  the  goods  already,  and  that  he  refused  to  show  me  them.  I  after- 
wards again  saw  Cole,  when  I  expressed  to  him  my  opinion  that  the  war- 
rants were  not  genuine.  He  replied,  that  I  need  not  be  alarmed  about  it ; 
that  they  were  genuine,  and  that  he  knew  the  goods  were  lying  at  the 
wharf. 

Cross-examined  by  Mr.  E.  Jajtes,  for  the  defence — In  the  course  of  our 
transactions  with  the  prisoner,  a  large  amount  of  warrants  were  deposited 
with  us,  and  our  transactions  in  this  form  amounted  to  £106,000. 

Mr.  Bodkin  wished  to  ask  the  witness  how  many  of  the  warrants  so 
alluded  to  had  been  discovered  to  be  fictitious  ? 

Mr.  Justice  IVIaule  was  of  opinion  that,  unless  the  warrants  themselves 
were  produced,  such  a  question  could  not  be  pressed. 

Several  warrants  being  produced,  witness  was  allowed  to  state,  with 
reference  to  them,  that  ho  had  been  to  the  wharf  at  which  the  goods  were 
declared  to  be  deposited,  and  the  wharfinger  had  refused  to  allow  him  to 
see  them. 

Mr.  Samuel  Goodbum,  clerk  to  Laing  and  Campbell,  was  then  sworn, 
—He  said,  in  the  early  part  of  the  present  year  I  made  inquiries  at  Hagen's 
Wharf  with  respect  to  the  goods  mentioned  in  these  warrants.    Tor  tho 


200  FACTS,   FATLUKES,   A>'D   FRATJDS. 

purpose  of  seeing  whether  tliey  were  really  at  the  wharf,  we  affected  to  have 
sold  them.  Lucy  and  Son,  lightermen,  made  a  sale  of  100  tons,  and  we 
delivered  to  them  the  warrants  for  spelter,  etc,,  which  were  in  our  posses- 
sion, but  they  did  not  succeed  in  obtaining  possession  of  the  goods.  In 
consequence  of  this,  I  went  on  the  20th  of  May  with  the  foreman  of  Lucy 
and  Son  to  Maltby's  ^^^la^f,  but  without  success.  On  that  occasion  we 
demanded  to  be  shown  the  goods.  We  were  shown  goods  in  a  warehouse 
belonging  to  Groves  and  Son,  which  Maltby  said  were  parcels  of  tin  which 
had  arrived  by  the  "  Pearl,"  and  by  the  "  Diana."  At  that  time  I  did  not 
tnow  that  this  warehouse  was  held  by  Groves  and  Son.  I  made  repeated 
unsuccessful  apphcations  for  the  delivery  of  these  goods. 

Cross-examined  by  51  r.  Ballantine. — The  balance  of  our  transactions 
with  the  prisoner  Cole  is  about  £11,000 ;  that  is  what  we  have  proved  for. 

Re-examined. — The  total  amount  of  the  warrants  which  turned  out  to 
be  valueless  was  about  £18,000.  Altogether  our  commission  would  be 
under  £2000 ;  the  interest  may  possibly  be  about  £3000. 

Mr.  Edwin  Brewer,  clerk  to  Messrs.  Glyn  and  Co. — The  defendant  had 
an  account  at  our  banking-house  in  July,  1832,  and  the  cheques  produced 
were  passed  to  his  credit  in  our  books,  and  paid  in  due  course. 

Mr.  C.  Henbrey,  lighterman,  examined. — I  remember  lightering  about 
65  tons  of  tin  from  the  "  Diana"  to  the  Platform  Wharf,  which  is  about  a 
mile  from  Hagen's  Wharf. 

Mr.  T.  Groves. — I  am  in  partnership  with  my  father  and  brother,  as 
wharfin<Ters,  at  Platform  Wharf,  and  also  have  warehouses  on  each  side  of 
Hageu's  Wharf.  On  the  19th  and  22nd  of  IS'ovember,  1852,  we  received 
at  the  Platform  Wharf  1053  slabs  of  tin,  ex  "  Diana,"  marked  A,  and 
1038  slabs  marked  B,  lightered  by  Henbrey.  On  the  receipt  of  that  tin, 
we  issued  70  warrants  for  it,  and  took  them  to  Cole  Brothers'  counting- 
house  one  of  the  clerks  there  giving  me  a  receipt.  1053  slabs  marked  A, 
and  75  of  those  marked  B,  were  delivered  on  the  13th  of  December,  1853, 
to  one  Gray  upon  the  warrants,  and  afterwards  the  delivery  of  the  1038 
slabs  marked  B  was  exhausted.  On  the  23rd  of  July,  1852,  we  received 
from  Maltby  700  slabs  of  bonded  tin,  which  was  deposited  in  our  ware- 
house at  Hagen's  Wharf,  and  for  which  upon  receipt  we  granted  war- 
rants. Those  goods  are  still  on  our  premises,  and  have  been  so  since  July, 
1852.  when  they  were  deposited.  Maltby  had  no  control  to  interfere  with 
the  lower  floor,  or  with  any  part  of  our  warehouse. 

Mr.  J.  C.  Pickersgill,  sworn,  said — I  am  of  the  firm  of  Pickersgill  and 
Son  merchants,  in  the  City.  We  were  in  the  habit  of  making  advances 
occasionally  to  Cole  Brothers,  or  rather  we  granted  our  acceptances  upon 
the  faith  of  warrants.  On  the  4th  of  May  in  the  present  year,  I  received 
a  letter  from  Cole  Brothers  to  this  effect : — "  Dear  Sirs,— We  beg  to  advise 
our  draft  at  four  mouths'  date  for  £2000,  and  request  you  to  deliver  to 


FACTS,   FAILUEZ8,   AKD  rUAUDS.  201 

bearer  warrants  for  40  tons  banca  tin  against  our  cheque  herewith,  for 
which  we  will  send  you  our  securities  this  afternoon."  In  consequence  of 
that  letter,  1  ret  urned  some  of  the  warrants  in  my  possession.  I  received 
in  exchange  warrants  for  27  tons  copper,  and  a  quantity  of  tin,  viz., 
21  tons  15  cwts.  2  qrs.  by  the  "  Pearl,"  700  slabs.  (Warrant  produced, 
Bigned  by  Groves  and  Son,  for  700  slabs  tin,  bearing  the  endorsemeut  of 
Colo  Brothers,  in  the  handwriting  of  the  prisoner.) 

Cross-examined  by  Mr.  Ballaxtixe. — We  have  had  transactions  to 
the  extent,  I  should  think,  of  half  a  million  with  the  prisoner.  There  have 
been  some  tilings  of  which  we  have  had  to  complain  in  the  course  of  our 
transactions,  but  altogether  we  have  found  the  conduct  of  the  firm  straight- 
forward, and  what  it  should  be. 

Mr.  Henry  Gray,  lighterman. — On  the  13th  of  December,  1853,  I  re- 
ceived at  the  Platform  Wharf,  1128  slabs  of  tin  upon  warrants. 

Mr.  Wm.  CrosGeld,  clerk  to  Messrs.  Marten,  Thomas,  and  Holland, 
solicitors,  of  Mincing  Lane,  said — My  employers  are  solicitors  to  Mrs. 
Hagen,  the  owner  of  that  wharf.  I  produce  the  counterpart  of  a  lease,  to 
which  I  am  the  attesting  witness,  dated  August  30,  1850,  between  Mary 
Hagcn,  on  the  one  part,  and  James  Edward  Cole  and  George  Harris  de 
Eussctt,  of  a  wharf.  Mrs.  Hagen  is  the  owner  of  some  property  in  the 
occupation  of  Messrs.  Groves. 

Mr.  George  Jolm  Graham,  the  official  assignee  of  the  bankrupt  Cole, 
produced  the  coimtcrparts  of  cheques,  show^ing  the  prisoner  to  have  paid 
the  expenses  of  the  lease,  and  one  year's  rent. 

Mr.  John  Brady  examined. — I  had  charge  of  Hagen's  Wharf  before 
Maltby  came  there,  which  was  in  1850.  Mr.  James  Cole,  brother  of  the 
prisoner,  put  me  in  charge  of  the  place.  I  remember  Maltby  first  coming 
there.  Mr.  James  Cole  came  with  hira,  but  I  did  not  see  the  prisoner. 
After  Maltby  had  the  management,  James  Cole  went  away  somewhere 
within  a  week  after.  ^Mien  I  had  been  some  time  with  Maltby  we  dis- 
agreed, and  I  gave  Maltby  notice.  I  used  to  go  to  Cole's  to  get  my 
wages,  and  when  I  was  going  away  I  went  to  Messrs.  Cole.  The  prisoner 
expressed  liis  regret  that  I  was  leaving,  but  said  that  they  were  not  the 
parties  individually  concerned  in  the  wharf. 

Charles  Daniel,  clerk  to  Messrs.  Hammill,  Solicitor  to  the  Customs, 
produced  a  bond  from  the  offices  given  by  Mr.  Maltby,  dated  December, 
1853.  Without  a  bond  of  that  description,  persons  could  not  land  at  a 
wharf  goods  liable  to  duty.  Up  to  the  date  I  have  mentioned,  there  was 
no  bond  in  existence  referring  to  Hagen's  Sufferance  Wharf. 

Cross-examined  by  Mr.  Clajbkson. — There  had  been  a  bond  given  by 
Groves,  but  at  the  time  he  gave  the  bond  the  premises  were  in  his  occu- 
pation. 

Mr.  Groves  was  directed  to  stand  up,  and  stated  that  he  had  given  a 


202  TACTS,   FAILTJEES,   A2fD  TEAUDS. 

bond ;  but  this  only  applied  to  the  warehouses  on  each  side  of  the  wliar^ 
and  not  to  the  wharf  itself,  which  was  never  in  his  possession. 

This  was  the  case  for  the  prosecution. 

The  LoED  Chief  Baeon  said  he  hardly  thought  the  court  had  been 
faii'ly  dealt  with  by  the  gentlemen  who  instracted  the  learned  counsel  for 
the  prosecution. 

Mr.  Bodkin. — In  what  way,  my  lord? 

The  Lord  Ceief  Baeox. — Wliy,  in  postponing  the  case,  owing  to  tho 
alleged  absence  of  important  witnesses,  whereas  Mr.  Henbrey  appears  to 
haye  been  the  only  witness  not  present.  He  seems  to  have  been  only 
absent  in  the  New  Court. 

The  court  was  here  adjourned  for  a  quarter  of  an  honr.  On  the  return 
of  the  learned  judge, 

Mr.  James  proceeded  to  address  the  jury  on  behalf  of  the  prisoner. 
In  a  case  of  this  kind,  he  said,  arising  out  of  transactions  of  very  consider- 
able magnitude,  it  was  necessary  that  they  should  distinctly  understand, 
in  order  that  they  might  arrive  at  a  just  perception  of  the  facts,  the 
peculiar  position  in  which  Cole  was  placed  in  reference  to  the  transactions 
in  which  he  was  engaged  in  1853.  They  must  remember  that  it  was  not 
for  any  irregularity  in  the  conduct  of  his  business,  and  it  was  not  for  any- 
thing which  stopped  short  of  a  criminal  character,  upon  which  he  could  be 
convicted;  but  the  prosecutors  must  show  beyond  all  reasonable  doubt 
that  on  the  29th  of  July,  1853 — which  was  the  important  date  to  be  kept 
in  view  in  these  transactions — when  these  two  waiTants  were  deposited 
with  Messrs.  Laing  and  Campbell,  the  prisoner  at  the  bar  had  a  guilty 
knowledge  that  these  were  fictitious  warrants,  and  did  not  represent  goods 
as  they  purported  to  do.  The  transactions  in  which  the  prisoner  had  been 
engaged  were  of  very  great  magnitude.  They  had  ended  disastrously  to 
him.  Mr.  Cole  had  embarked  in  large  speculations — in  transactions  wliich 
with  the  prosecutors  alone  amounted  to  upwards  of  £100,000  a-year,  and 
with  another  firm  (Pickersgill)  to  half  a  million  of  money,  Mr.  Pickers- 
gill  stating  that  throughout  those  transactions  there  certainly  were  irre- 
gularities, of  which  he  did  not  approve,  but  that  to  his  knowledge  there 
was  nothing  dishonest  or  dishoQourable  on  the  part  of  the  prisoner  at  the 
bar.  There  was  no  doubt  that  in  the  course  of  the  vast  transactions  which 
occurred  in  tbis  line  of  commerce,  in  which  enterprise  and  speculation  were 
rife  to  an  extent  wholly  without  a  parallel  in  any  other  part  of  the  world — 
in  a  capital  like  this,  where  so  many  different  kinds  of  securities  existed — 
persons  were  dependent,  to  a  great  degree,  upon  their  clerks,  and  to  others 
to  whom  they  must  confide.  Now  he  hoped  to  show  that,  upon  the  evi- 
dence as  it  stood,  nothing  had  been  brought  home  to  the  prisoner  at  the 
bar — that  there  was  no  evidence  to  show  that  the  prisoner,  at  the  time  he 
deposited  these  warrants  with  Messrs.  Laing  and  Campbell,  upon  the  29th 


PACTS,    FAILITKES,   A>'D    TEAUDS.  203 

of  Julj,  1853,  knew  that  there  were  not  at  Ilagen's  Sufferance  Wharf  goods 
which  properly  represented  those  warrants.  How  did  the  prosecutors  seek 
to  bring  home  the  charge  of  a  guilty  knowledge  ?  They  began  by  endea- 
vouring to  establish  an  intimate  connection  between  Maltby  and  the  prisoner 
at  the  bar.  Maltby  was  a  wharfinger,  and  the  lessee  of  Ilagen's  Sufferance 
Wharf ;  and  the  prosecutors  endeavoured  to  show  that  Cole  was  the  real 
owner  and  lessee  of  that  property.  Yet  they  had  upon  record  the  fact 
that  the  prisoner,  when  spoken  to  on  the  subject  of  Brady  leaving  the 
wharf,  had  replied  that  ho  was  not  individually  connected  with  it.  The 
brother  of  the  prisoner  and  Mr.  do  Russett  were  the  lessees,  while 
Llaltby  appeared  the  person  ostensibly  carrying  on  business  there,  and 
•was  treated  by  Mr.  Groves  as  the  real  proprietor.  Now  the  subject  of  the 
present  indictment  was  two  warrants — one  dated  August  30,  1852,  and 
another  dated  November  23,  1852,  issued  by  Maltby  and  Co. — upon  goods 
landed  from  tho  ships  "Diana"  and  "PearL"  These  warrants  were 
deposited  with  Messrs.  Laing  and  Campbell  on  the  29th  of  July,  1853, 
and  formed  a  portion  of  tho  security  for  their  advance.  Mr.  Groves 
declared  that  he  had  these  goods  brought  to  his  wharf,  Maltby  coming  down, 
and  apprising  him  that  the  goods  would  come,  and  would  be  placed  upon  his 
wharf.  Now  there  was  no  evidence  to  show  that  Cole  had  made  use  of  one  of 
tho  seventy  warrants  issued  by  Mr.  Groves,  or  had  made  use  of  one  of  them 
at  tho  time  he  lodged  Maltby's  warrants  in  the  hands  of  Messrs.  Laing  and 
Campbell.  This  statement  was,  subsequently,  in  the  course  of  the  learned 
Chief  Baron's  charge,  contradicted  by  Mr.  Pickersgill,  who  stated  that  at 
all  events  ho  had  had  a  portion  of  the  seventy  warrants  alluded  to  in  his 
possession  in  the  course  of  1852.  Mr.  James  continued,  by  observing 
that  Maltby  was  not  present,  and  if  ho  had  been,  neither  he  nor  Cole 
could  have  explained  tho  course  of  business.  He  submitted,  however,  that 
tho  facts  as  they  had  been  stated  in  the  course  of  tho  evidence  were  sus- 
ceptible of  a  satisfactory  explanation  as  regarded  Cole.  What  reason  had 
Cole  to  doubt  the  genuineness  of  Maltby's  warrants  ?  Colo  had  bought 
and  paid  for  tho  goods ;  he  knew  they  were  at  some  wharf  or  other,  and 
that  the  goods  represented  by  the  warrants  issued  by  Maltby  and  Com- 
pany were  in  their  possession  somewhere ;  and  where  was  there  a  tittle  of 
evidence  to  prove  that,  in  the  courso  of  such  enormous  transactions,  ho 
knew  the  particular  goods  represented  by  these  warrants  were  not  where 
they  were  declared  to  be,  at  tho  Sufferance  ^Vharf,  but  had  been  taken 
down  to  tho  Platform  Wharf?  What  was  more  natural  than  (hat  tho 
prisoner  should  believe  Maltby  had  the  goods  in  his  possession  at  the  timo 
tho  warrants  were  issued  ?  The  evidence  offered  with  respect  to  the  search 
at  the  wharf  in  May,  1854,  when  Maltby  had  absconded,  and  had  in  all 
probabiUty  been  dealing  fraudulently  with  these  goods,  had  nothing  what- 
ever to  do  with  the  charge  now  preferred.     Tho  prosecutors  must  prove 


201<  TACTS,   TAILrEES,   A^'D   rnAl'DS. 

tliat  in  July,  1S33,  the  prisoner  had  guiltily  placed  these  warrants  in  the 
hands  of  the  persons  making  the  advances,  he  knowing,  at  the  time  of 
doing  so,  that  the  said  warrants  were  not  represented  by  goods.  The 
learned  counsel  for  the  prosecution  had  sought  to  supply  the  defect  in  their 
chain  of  evidence,  by  an  assumption  of  complicity  between  Maltby  and 
Cole.  But  how  was  this  evidence  supplied  ?  He  ventured  to  submit  that 
there  was  no  evidence  of  the  sort  forthcoming.  The  goods  alluded  to  in 
the  warrants  had  duly  arrived :  they  were  actually  in  existence  ;  and  it  was 
immaterial  to  Cole  whether  or  not  they  were  at  Hagen's  SujBTerance  Wharf, 
or  at  the  Platform  Wharf.  Maltby  represented  them  as  being  at  Hagen's 
Wharf,  and  where  was  the  proof  that  Cole  knew  the  contrary  to  be  the 
fact  ?  It  was  perfectly  true  that,  in  commercial  transactions  of  this  kind, 
perfect  good  faith  was  requieite  ;  but  it  was  also  to  be  remembered  that,  in 
criminal  cases,  there  must  be  conclusive  evidence  to  show  that  the  crime 
alleged  did  not  arise  merely  out  of  business  irregularities,  but  that  there 
was  actually  a  criminal  knowledge  at  the  time  of  these  transactions.  Upon 
all  these  grounds  he  submitted  that  their  verdict  ought  to  be  for  the  pri- 
soner, and  he  confidently  appealed  to  them,  in  the  expectation  that  this 
would  be  the  verdict  at  which  they  would  arrive. 

Ko  witnesses  were  called  upon  the  part  of  the  prisoner,  and  the  counsel 
for  the  prosecution  were,  therefore,  not  entitled  to  reply. 

The  LoKD  Chief  Baeon  then  proceeded  to  sum  up  the  case.  The 
prisoner  at  the  bar,  he  said,  had  been  indicted  for  obtaining  money  on  false 
pretences,  and  for  procuring  the  advance  of  £10,000  upon  the  security  of 
goods  supposed  to  be  at  a  certain  wharf,  there  being  at  that  time  no  such 
goods  at  all  at  that  wharf.  That  was  the  charge.  On  the  part  of  the  pro- 
secution they  had  endeavoured  to  make  out  that  the  prisoner  was  con- 
nected with  Maltby  in  some  fraudulent  plan  of  takmg  pi-emises  for  the 
irarpose  of  entering  into  fraudulent  transactions  of  the  nature  which,  it 
was  alleged,  those  now  in  question  had  been.  The  prosecution  might  have 
failed  in  that  part  of  the  case,  but  there  still  would  be  vei-y  much  which 
deserved  the  serious  consideration  of  the  jury.  There  was  no  doubt,  as 
had  been  observed  by  the  learned  counsel  for  the  prisoner,  that  part  of  the 
case  for  the  prosecution  was  the  charge  of  a  sort  of  conspiracy  between 
the  prisoner  and  Maltby,  who  apparently  was  to  have  been  tried  with  the 
prisoner,  but  who  had  got  away,  to  take  premises  for  the  express  purpose 
of  committing  fraud.  The  jury  would  have  to  consider  whether  this  had 
really  been  established,  but  though  they  might  be  of  opinion  that  this  was 
not  made  out,  they  would  still  have  to  consider  whether  the  prisoner  at  the 
bar  had  obtained  money  under  false  pretences  which,  if  he  did  not  abso- 
lutely know  them  to  be  false,  he  had  no  reason  to  believe  were  true.  The 
case  differed  from  some  with  which  it  might  be  compared,  and  certainly 
differed  in  a  manner  which  was  favourable  to  the  prisoner.      If  this  had 


FACTS,  TATLrnES,  AXD  FRAUDS.  205 

been  a  case  of  forging  a  bill,  he  knew  he  should  have  thouglit  it  of  no  sort 
of  importanco  whether  a  man  had  been  engnged  in  transactions  to  the 
extent  of  one,  two,  or  ten  thousand  pounds.  No  amount  of  transactions 
could  justify  the  putting  the  name  of  another  person  to  a  bill,  and  issuing 
it  upon  the  authority  of  that  person.  But  the  case  for  the  prisoner  was 
that  there  might  have  been  large  transactions  between  him  and  Mnltby,  and 
Maltby  might  have  declared  to  him  that  goods,  which  undoubtedly  did 
come,  were  duly  represented  by  the  warrants  which  were  delivered  to 
Messrs.  Laing  and  Campbell — these  warrants  representing  them  to  be  in 
one  place,  when  in  point  of  fact  they  were  in  another.  The  offence  charged 
against  the  prisoner  was  one  of  a  very  serious  description,  on  account  of  its 
bearing  upon  a  branch  of  commerce,  and  a  portion  of  commercial  dealings, 
which  undoubtedly  required  extreme  good  faith,  and  with  regard  to  which 
one  could  not  be  at  all  surprised  that  great  anxiety  should  exist  to  get  at 
the  truth.  His  lordship  then  read  over  the  evidence  which  had  been 
adduced  for  the  prosecution,  commenting  upon  it  as  he  read.  It  might  be 
taken  for  granted,  in  the  first  place,  that  not  any  goods  like  those  named 
in  the  warrants  were  really  at  Hagen's  Wharf,  and  that  the  warrants  which 
referred  to  them  in  the  possession  of  Laing  and  Campbell  represented  that 
which  was  not  true.  700  slabs  of  tin  were  landed  from  the  "  Pearl,"  and 
1052  from  the  "  Diana,"  both  on  behalf  of  Cole.  There  did  not,  however, 
sppear  any  reason  to  believe  that  any  such  goods  were  ever  landed 
and  received  by  Maltby  on  account  of  Cole,  though  it  did  turn  out 
that  some  goods  of  a  similar  kind  were  received  at  another  wharf; 
and  that  at  that  wharf  other  warrants  were  issued  for  those  goods, 
■which  other  warrants  were  used  by  the  prisoner  at  the  bar.  In 
answer  to  this  it  was  urged  by  Mr.  James,  on  behalf  of  the  pri- 
soner, that  Maltby  might  have  deceived  Cole  in  regard  to  these  war- 
rants, and  that  the  prisoner  might  have  used  them  in  ignorance  of 
there  being  really  no  such  goods  at  Hagen's  Wharf.  It  was  thus  sought  to 
•how  that  the  prisoner  was  a  person  who  had  been  imposed  on,  whereas  it 
was  the  duty  of  the  prosecution  to  prove  that  Cole  was  not  the  person 
imposed  on,  but  that  ho  was  concurring  with  Maltby  in  imposing  upon 
others.  Now  it  was  true  enough  that  Maltby  was  not  here,  and  could  not 
explain  how  the  case  really  stood,  but,  in  considering  if  it  were  true  that 
Maltby  had  imposed  upon  the  prisoner  in  this  matter,  the  jury  ought  to 
remember  that  commercial  transactions  of  this  importance  did  not  gene- 
rally take  place  by  word  of  mouth.  Almost  every  transaction  of  such 
importanco  as  must  have  taken  place  between  Maltby  and  the  prisoner,  if  the 
view  sought  to  be  established  was  well  founded — they  would  naturally 
expect  to  find  every  such  transaction  vouched  for  by  documents.  Thus, 
the  sending  of  goods  was  generally  accompanied  by  an  invoice  ;  the  pay- 
ment of  money  was  vouched  for  by  a  receipt }  and  so  on,  jou  could  gcno- 


20G  FACTS,    FAILTJEES,   A^'D   FRArDS. 

rally,  by  reference  to  boots,  by  reference  to  documents,  by  reference  to  co- 
temporaneous  entries,  get  the  actual  history  of  commercial  transactions ; 
and  there  was  certainly,  therefore,  a  difficulty  in  the  explanation  afforded 
by  Mr.  James.  That  objection  seemed  to  be  this : — According  to  that 
explanation,  there  did  not  appear  to  be  any  motive  to  Maltby  to  act  as  he 
had  done.  Wliy  should  Maltby  multiply  these  goods  ?  Why  sliould  he 
give  warrants  for  them  as  being  in  one  place,  when  they  were  really  at 
another  ?  This  was  the  difficulty  in  the  way  of  accepting  the  explanation 
set  up  for  the  defence.  If  no  goods  at  all  existed  at  Hagen's  Wharf,  what 
motive  could  Maltby  have  in  saying  to  the  prisoner,  "  I  will  issue  warrants 
for  you  to  go  into  the  market  with  ?"  This  was  a  question  which  the  jury 
would  have  to  consider.  There  was  no  doubt  that  £10,000  had  been 
advanced  by  Messrs.  Laing  and  Campbell  upon  the  security  of  these  war- 
rants, and  that  the  prisoner  had  obtained  the  benefit  of  them ;  and  the 
only  question  therefore  was,  whether  the  money  had  been  obtained  under 
the  circumstances  of  fraud  mentioned  in  the  indictment.  Mr.  Laing, 
having  become  uneasy  with  respect  to  the  goods,  states  that  he  saw  Maltby, 
who  refused  to  show  him  any  goods  at  all,  and  afterwards  went  to  Cole, 
who  said  that  one  of  the  prosecutors'  clerks  had  seen  the  goods,  and  who, 
therefore,  refused  to  give  Mr.  Laing  an  order  to  see  them  again.  Now  the 
jury  would  have  to  consider  what,  as  men  of  business,  would  appear 
natural  conduct  on  the  part  of  a  gentleman  in  a  large  way  of  business, 
upon  receiving  an  intimation  that  two  warrants  on  which  he  had  obtained 
an  advance  of  £10,000  were  suspected  of  being  fraudulently  issued.  They 
would  ask  themselves  whether,  when  the  person  who  had  made  such  an 
advance  expressed  a  desire  to  see  the  goods,  it  was  natural  on  the  part  of 
a  merchant  to  refuse  an  order  to  see  the  goods  on  such  a  ground  as  that  alleged 
by  the  prisoner.  They  must  consider  whether  the  conduct  of  an  honourable 
man  suffering  under  such  an  imputation  would  be  of  that  kind,  or  whether  he 
would  not  rather  have  said,  "  Is  it  possible  that  you  doubt  the  existence  of 
the  goods?  I  will  go  with  you  myself,  and  see  whether  they  are  at  the  wharf." 
Would  an  honourable  man  say,  "  I  will  not  give  you  an  order  to  see  the 
goods,  for  your  clerk  has  seen  them  already  ?"  Now,  if  the  clerk  had  really 
not  seen  the  goods,  as  it  was  declared  he  had,  but  had  been  shown  other 
goods  substituted  for  them,  then  to  be  sure  the  jury  would  have  to  consider 
whether  the  prisoner  was  imposed  upon  by  Maltby,  and  whether  he  really 
believed  them  to  be  the  goods  or  not.  They  would  have  to  weigh  the  facts 
for  themselves,  and  to  ask  whether  the  conduct  of  the  prisoner  had  been 
that  to  be  expected  from  a  perfectly  innocent  man  free  from  any  suspicion 
or  reproach,  and  having  no  part  in  any  fraud,  or  whether  it  was  not  the 
conduct  of  a  man  who  saw  there  was  something  vfrong  in  the  transaction, 
and  was  disposed  to  postpone  the  matter  as  long  as  he  could.  As 
he  had  before  observed,  the  conduct  of  a  man  under  such  circumstances 


FACTS,    FAILUEES,   A2fD   FBAtJDS.  207 

formed  a  material  subject  for  consideration.     What  would  be  the  course  to 
be  expected  from  an  eminent  merchant,  on  being  told  that  warrants  of 
vrhicli  he  availed  himself  to  obtain  advances  were  not  genuine?     Would  he 
not  have  replied,  "  Don't  let  us  sleep ;  don't  let  us  rest ;  don't  let  us  cat  or 
drink  before  vfb  go  to  the  wharf  and  see  whether  the  charge  is  true  or  not  ?'' 
Again,  he  repeated  that  he  did  not  see  what  object  Multby  could  have 
in  doubling  the  goods  merely  for  the  benefit  of  the  prisoner.     Maltby  him- 
self might  indeed  well  be  out  of  the  way,  because  there  could  be  no  doubt 
as  to  his  conduct,  in  the  issue  of  the  fraudulent  warrants ;  but  what  motive 
could  ho  possibly  have  when  the  prisoner  at  the  bar  appeared  clearly 
enough  to  have  had  the  benefit  of  the  true  and  of  the  false  warrants  ?    The 
jury,  however,  would  have  to  judge  for  themselves,  as  men  of  business,  as 
well  as  men  of  fairness  and  candour,  and  see  whether  there  was  any  founda- 
tion for  the  statement  that  the  prisoner  got  the  benefit  of  the  transaction 
pocketing  the  produce  both  of  the  true  and  the  false  warrants,  but  yet  knew 
nothing  whatever  of  the  criminal  transaction.     If  the  charge  of  conspiracy 
were  all  that  had  to  be  considered,  he  did  not  think  the  evidence  was 
sufficient  to  prove  this  ;  but,  on  the  other  hand,  the  facts  proved  did  not 
in  the  slightest  degree  advance  the  case  in  favour  of  the  prisoner.   It  might 
be  that  the  prosecutors  had  failed  to  sustain  the  charge  of  conspiracy,  but 
still  there  was  left  behind  the  inquiry  how  it  was  that  Maltby,  though  not 
receiving  the  goods,  could  yet  give  warrants  for  them.    It  was  a  serious 
question  for  the  jury  to  consider  what  object  Maltby  could  have  had 
in  doing  this,  and  how  it  was  possible  that  the  prisoner  could  have  dealt 
with  cargoes  twice  over.    The  question  was  whether  they  collected,  from 
all  the  transactions  which  had  been  placed  before  them,  that  the  prisoner  at 
the  bar  had  a  guilty  knowledge  that  these  documents  were  not  genuine.  If 
they  thought  all  this  was  a  mere  mistake,  mere  negligence  on  the  part 
of  the  prisoner,  and  that  he  supposed  when  handing  over  these  warrants  for 
£10,000  that  he  was  handing  over  genuine  warrants,  he  was  of  course 
entitled  to  an  acquittal.     On  the  other  hand,  if  they  thought  that  he  had 
the  means  of  knowing,  that  in  point  of  fact  he  did  know,  and  could  scarcely 
be  ignorant  tliat  the  property  which  he  had  imported  in  the  "Diana"  and 
"  Pearl"  was  somehow  or  other  doubled  upon  his  hands, — if  they  believed 
that  at  the  time  of  obtaining  this  sum  of  £10,000  he  knew  that  the  security 
ofTered  did  not  exist,  then  it  would  be  the  duty  of  the  jury  to  convict  the 
prisoner.    They  must  bear  this  in  mind — it  was  sufficient  to  justify  a  con- 
viction if  they  believed  that  the  prisoner  meant  to  raise  money  upon 
a  security  which  had  no  existence,  even  though  very  likely  it  was  his  inten- 
tion to  redeem  his  position,  and  that  he  never  intended  to  run  away,  and 
go  off  with  the  profits  of  his  fraud.    It  was  sufficient  if^  however  honest  his 
iJtimate  intention  might  be,  the  jury  believed  that  the  prisoner  knew, 
at  the  time  of  obtaining  this  advance,  that  these  warrants  did  not  represent 


203  FACTS,    TAIirEES,   A>-D   TBAUDS. 

real  goods  in  the  possession  of  Maltby,  and  tbat  he  intended  to  establish  a 
sort  of  fictitious  credit  for  the  occasion  which,  when  it  answered  his  purpose 
to  do  so,  and  supposing  his  speculations  were  successful,  he  intended 
to  replace  and  repay.  This  was  no  answer  to  the  present  charge.  If  a  man 
charged  with  forgery  said,  "  I  did  not  mean  to  defraud,  and  meant  to  take 
up  the  bill,  or  to  replace  the  money  fraudulently  received,"  this  was  no 
defence ;  in  the  eye  of  the  law,  such  person  was  as  guilty  as  the  man  who 
raised  money  by  a  forgery,  and  then  ran  away.  There  might,  to  a  moralist, 
be  a  difference  between  the  two  cases ;  but,  as  he  had  said,  in  the  eye  of  the 
law  they  were  the  same.  It  might  be  urged,  that,  even  supposing  the 
prisoner  to  have  had  a  guilty  knowledge,  in  all  probability  it  was  his  inten- 
tion, if  his  concerns  had  gone  on  prosperously,  to  substitute  other  securi- 
ties for  these  now  in  question.  His  circumstances,  however,  had  become 
reduced,  and  now  the  question  was,  not  whether  the  prisoner  intended 
ultimately  to  cheat,  but  whether  he  intended  to  give  a  security  which,  at  the 
time  of  his  giving  it,  he  knew  was  not  represented  by  goods.  If  that  were 
the  opinion  of  the  ji.ry,  it  would  be  their  duty  to  return  a  verdict  of  Guilty ; 
if  they  were  actuated  by  a  contrary  impression,  of  course  the  prisoner 
would  have  the  benefit  of  it. 

The  juiy,  without  retiring,  deliberated  in  their  box  for  a  few  moments 
only,  and  then  returned  a  verdict  of  Guilty. 

Mr.  BoDKix  said  there  were  several  other  indictments  against  the 
prisoner  for  similar  transactions,  but  it  was  considered  that  the  purposes  of 
justice  wculd  be  sufficiently  answered  by  the  present  conviction. 

Sentence  was  deferred  till  the  following  day,  when  the  prisoner  Cole  was 
brought  up. 

The  Chief  Baeon,  addressing  him,  said — Prisoner  at  the  bar,  you  have 
been  tried  and  convicted  for  misdemeanour  for  obtaining  money  under  false 
pretences.  The  false  pretence  consisted  in  presenting,  as  a  valid  security 
for  goods,  warrants  signed  by  a  person  named  Maltby,  purporting  that 
goods  were  in  liis  warehouse,  when  it  turned  out  that  no  such  goods  at  any 
time  were  there,  but  goods  of  that  description  were  in  a  neighbouring 
warehouse,  which  it  seems  very  clearly  were  pointed  out  to  the  clerk  of  the 
person  who  advanced  the  money.  Upon  the  faith  of  those  securities  you 
obtained  the  sum  of  £10,000,  and  from  the  resvdt  it  appears  that  by  this 
false  pretence  you  obtained  that  money,  and  the  jury  have  found  you  guilty 
of  using  that  security  with  a  perfect  knowledge  that  it  was  altogether  worth- 
less. I  entirely  agree  with  the  verdict  of  the  juiy.  I  think  from  the  facts 
which  came  out  in  evidence,  it  is  quite  clear  that  you  had  a  guUty  know- 
ledge of  the  security  not  being  worth  anything.  I  do  not  think  it  material 
to  inquire  whether  this  is  one  of  many  other  instances  in  which  the  same 
sort  of  conduct  may  have  been  adopted,  and  the  same  crime  committed. 
There  may  be  some  i-eason  for  believing  that  this  is  not  a  solitary  instance 


FACTS,   rAILUBES,   AND   FBAUDS.  209 

from  part  of  tbo  evidence  aJdiiccd.  This,  however,  T  do  not  deem  it  neces- 
sary to  inquire  into,  nor  do  I  think  it  material  to  inquire  whether  you 
intended  ultimately  to  repay  the  money,  and  adopted  this  fraud  merely  to 
get  over  a  present  difficulty.  The  offence  is  that  of  obtaining  a  very  large 
sum  of  money  upon  the  faith  of  a  security  which  was  substantially  a 
forgery,  professing  to  represent  goods  which  did  not  exist  on  the  spot,  and 
under  the  circumstances  which  the  document  represented  they  did  exist. 
I  can  conceive  few  offences  of  a  dishonest  character  more  dangerous  to  the 
community  in  which  we  live  than  that  of  which  you  have  been  found 
guilty.  Comparing  your  offence  with  the  dishonest  acts  of  many  thousands 
who  have  poverty  and  want,  bad  education,  and  worse  example,  as  possibly 
some  extenuation  for  their  oiTences,  it  appears  to  me  that  the  offence  of 
which  you  have  been  found  guilty  is  among  the  worst  that  can  be  brought 
under  the  notice  of  a  Court,  the  character  of  which  offence  is  dishonest  as 
between  man  and  man.  You  have  apparently  been  involved  in  transactions 
to  a  very  large  amount ;  but  I  can  receive  that  as  furnishing  no  pretence 
for  saying  that  this  by  any  possibility  could  have  occurred  through  neglect 
and  carelessness.  It  may  have  been  cither  from  a  love  of  wealth,  or  a 
desire  to  become  rich.  You  may  have  adopted  this  method  of  raising 
money  when  you  had  no  legitimate  means  upon  which  to  ask  for  credit,  in 
order  to  get  over  a  present  difficulty ;  but  in  whatever  way  the  transaction 
began,  it  appears  to  me  that  your  offence  against  society  is  one  of  the  most 
dangerous,  and  one  of  the  most  criminal,  that  can  be  committed  under  cir- 
cumstances of  this  sort.  Upon  these  considerations,  passing  sentences  of 
severity  upon  persons  who  commit  crimes,  in  my  opinion,  far  less  dangerous, 
and  far  less  criminal,  it  is  impossible  for  me  not  to  proceed  to  the  utmost 
limit  of  punishment  which  I  have  by  the  power  of  the  law  the  means 
of  inflicting  upon  your  offence,  so  that  your  example  may  deter  others  from 
committing  similar  offences,  and  that  it  may  not  be  supposed  that 
the  magnitude  of  a  man's  transactions  is  to  exempt  him  from  a  severe 
punishment,  if  he  is  guilty  of  that  sort  of  disregard  of  the  property  of 
others  which  woidd  bring  persons  in  different  circumstances  to  condign 
punishment.  The  sentence  of  the  Court  is  that  you  be  detained  in  penal 
servitude  for  the  space  of  four  years. 

The  prisoner  attempted  no  remarks  to  the  Court,  and  was  then  removed 
from  the  dock. 


210  FACTS,   FAILUIIES,    A2?D   JEAUDS. 


TKIAL  OF  DAVIDSON,  GOEDON,  AND  COLE. 

Cextbai  Ceiminai.  CotTET,  August  23, 1855. 

{Before  Mr.  Justice  Eele.) 

Daniel  Mitcliell  Davidson,  aged  41,  and  Cosmo  William  Gordon,  St, 
both  described  as  merchants,  were  placed  at  the  bar  of  the  Central  Criminal 
Court,  to  plead  to  seyeral  indictments  charging  them  with  obtaining  various 
large  sums  of  money  by  false  pretences.  Another  prisoner,  named  Joseph 
Windle  Cole,  also  described  as  a  merchant,  already  under  a  sentence  of 
penal  servitude,  upon  a  conviction  arising  out  of  some  of  the  transactions 
in  which  the  prisoners  Gordon  and  Davidson  were  involved,  was  also  placed 
at  the  bar. 

There  were  four  or  five  indictments  against  the  two  last-mentioned 
prisoners,  the  amounts  mentioned  as  having  been  obtained  by  them  being 
stated  at  £4100,  £2400,  £4900,  £7000,  and  £17,000, 

They  were  also  charged  under  the  Bankruptcy  Act  with  felony,  in  not 
having  surrendered  to  be  examined  at  the  Bankruptcy  Court  on  the  day 
fixed  for  that  purpose  by  the  Commissioner, 

There  was  likewise  another  indictment  in  which  the  prisoners  Davidson 
and  Gordon  were  charged  jointly  with  Cole  with  conspiracy  to  obtain  money 
by  false  pretences. 

The  prisoners  pleaded  "  Not  Guilty  "  to  the  whole  of  the  charges. 

Mr,  Ballantine  and  Mr.  Poland  conducted  the  prosecution ;  Mr.  M, 
Chambers,  Q.  C,  Mr.  Clarkson,  and  Mr.  Parry  were  counsel  for  Gordon ; 
and  Mr.  Serjeant  Byles  and  Mr.  Bodkin  appeared  for  Davidson,  Mr.  Edwin 
James,  Q.  C,  and  Mr,  YalHngs  were  also  present,  retained  to  watch  the 
case  on  behalf  of  Messrs,  Overend,  Gurney,  and  Co. 

It  was  arranged  that  the  case  first  taken  should  be  the  charge  against 
the  prisoner  Gordon  for  not  having,  after  he  was  adjudged  a  bankrupt, 
surrendered  to  be  examined  on  the  day  fixed  by  the  Commissioner  of  Bank- 
ruptcy for  his  doing  so,  which  by  the  Bankruptcy  Act  is  made  a  felony, 
and  renders  the  person  convicted  of  the  ofience  Hable  to  be  transported 
for  life, 

Mr.  Baixantine,  in  opening  the  case  for  the  prosecution,  observed  that 
it  was  one  which  must  be  regarded  as  of  the  utmost  importance  in  a  com- 
mercial community  ;  and  there  could  be  no  doubt,  from  the  position  of  the 
prisoner,  the  amount  of  his  dealings,  and  his  connection  with  houses  of 
considerable  reputation  in  the  City  of  London,  that  the  case  had  attracted 
a  very  large  amount  of  public  attention.  The  charge  against  the  prisoner 
was  framed  under  the  12th  and  13th  of  Victoria,  cap.  106,  by  the  251st 
section  of  which  various  matters  were  declared  to  be  ofiences  when  com- 


PACTS,   FAILUHES,    AND   FEArDS.  211 

mitted  by  persons  in  the  position  of  a  bankrupt.  The  Act  provided  that 
those  offences  must  be  committed  with  an  intention  to  defraud,  and  the 
prisoner  at  the  bar  was  arraigned  for  one  of  those  offences — namely,  for 
that,  being  a  bankrupt,  he  did  not  surrender  to  the  fiat  of  bankruptcy,  as 
it  was  his  duty  to  do  under  certain  rules  which  were  laid  down  by  the  Act 
of  Parliament.  In  order  to  maintain  the  present  charge,  it  was  essential 
to  show  that  in  that  non-surrender  the  prisoner  had  been  governed  by 
fraudulent  intentions  ;  because  he  believed  that  the  words  "  with  intent  to 
defraud  "  applied  to  all  the  previous  part  of  the  section.  It  would  be  the 
duty  of  the  prosecution,  therefore,  to  submit,  1st,  that  the  prisoner  did  not 
surrender  to  his  bankruptcy ;  and,  2ndly,  that  his  non-surrender  was  in- 
tended for  purposes  of  fraud.  The  name  of  the  prisoner  was  Cosmo  Wil- 
liam Gordon,  and  he  was  in  partnership  with  one  Daniel  Mitchell  Davidson. 
Somewhere  about  the  year  1847,  he  believed  both  those  persons  were  bank- 
rupts. They  recommenced  business,  however,  again  in  1848.  With  what 
amount  of  capital  they  did  so  he  was  unable  to  say ;  but  the  probability  was, 
from  the  fact  of  their  having  been  bankrupts  so  shortly  before,  that  their 
capital  was  not  very  large.  However,  they  did  recommence  busines',  and 
tliere  could  be  no  doubt  but  that  for  four  years  their  dealings  as  colonial 
brokers  and  metal  dealers  were  of  a  very  extensive  character  indeed — so 
great,  in  fact,  was  the  amount  of  business  which  they  were  transacting  in 
the  City  of  London,  that  it  almost  attracted  attention  from  its  largeness. 
This  continued  for  some  period ;  but  he  believed  that  towards  the  end  of 
1852,  or  the  beginning  of  1853,  they  changed  altogether  the  character  of 
their  business,  for  they  then  became  the  purchasers,  from  a  person  named 
Webb,  of  a  large  distillery  at  West  Ham,  in  Essex,  and  from  that  period 
they  carried  on  that  concern  in  addition  to  the  business  of  general  merchants 
and  brokers.  The  jurj'  were  probably  aware  that  in  the  City  of  London  it 
waa  the  habit  to  represent  large  quantities  of  goods  which  were  in  dock  or 
elsewhere  by  warrants,  in  which  a  description  of  the  goods  was  given.  It 
appeared  that  the  prisoner,  in  conjunction  with  his  partner  Davidson,  and 
with  Cole,  who  was  intimately  connected  with  them  from  1853  down  to  the 
time  of  the  bankruptcy,  dealt  very  largely  in  such  warrants,  representing 
himself  and  partner  to  be  the  possessors  of  the  property  to  which  they  re- 
ferred. It  happened  that,  in  the  most  genuine  transactions  even,  large 
advances  were  from  time  to  time  required  before  the  goods  came  to  hand  or 
could  be  disposed  of,  and  it  was  customary  to  advance  sums  of  money  upon 
the  faith  and  credit  of  men  who  were  possessed  of  these  warrants  ;  and  the 
prisoner,  enjoying  at  that  time  a-edit  in  the  City  of  London,  did,  at  different 
periods,  obtain  advances  to  a  very  largo  amount  upon  them.  Among  the 
establishments  with  which  he  became  connected  was  a  high  mercantile 
house  in  the  City,  carrying  on  business  under  the  name  of  Overend,  Gumey, 
and  Co.    Mr.  Gumey  was,  he  believed,  an  old  man,  and  took  no  active  part 


212  TACTS,   FATLIJEES,   ASD   PEArDS. 

in  the  business,  wLich  was  principally  carried  on  by  Mr.  Chapman,  a  gen- 
tleman of  considerable  knowledge  and  great  ability.  From  time  to  time 
Messrs.  Orerend  and  Gurney  made  very  large  advances,  and  in  October, 
1853,  the  advances  which  they  had  made  to  Gordon  on  behalf  of  himself 
and  partner,  amounted  altogether  to  not  much  less  than  £200,000.  In  that 
month  of  October,  Mr.  Chapman  became  suspicious  of  the  nature  of  his 
securities,  and  inquiries  which  he  made  upon  the  subject  resolved  his  sus- 
picions into  absolute  certainty.  He  sent  for  Gordon,  and  a  conversatioa 
took  place  between  them,  which  resulted  in  Mr.  Chapman  saying  to  Gordon 
that  up  to  that  period  he  had  thought  him  an  honest  man,  but  that  now  he 
found  him  to  be  a  rogue  ;  and  Gordon  then  admitted,  substantially,  to  Mr. 
Chapman,  that  every  one  of  those  warrants  on  which  upwards  of  £80,000 
had  been  advanced  was  of  a  fictitious  and  fraudulent  character,  and  that  if 
they  did  not  in  point  of  law  amount  to  forgeries,  they  were  forgeries  in 
point  of  reaUty  and  fact. 

Mr.  Chambees  here  interposed,  upon  the  ground  that  the  question  of 
fraudulent  warrants  did  not  bear  upon  the  present  charge,  of  not  surren- 
dering to  the  fiat  of  bankruptcy. 

Mr.  Baixantine  thought  that  it  was  necessary  to  show  what  was  in  the 
mind  of  the  prisoner  when  he  absconded,  and  failed  to  surrender  to  hia 
bankruptcy.  He  would  confine  himself,  however,  to  a  narrative  of  the  case, 
and  to  observations  which  were  strictly  pertinent  to  the  charge.  Subse- 
quently it  appeared  that  the  prisoner  went  to  Mr.  Webb,  the  original  owner 
of  the  distillery,  and  informed  him  that  Mr.  Chapman  had  told  him  that  he 
(the  prisoner)  was  a  rogue,  but  that  he  must  not  allow  a  syllable  upon  the 
subject  to  escape  his  lips,  and  must  keep  it  an  entire  secret  from  the  world. 
After  this  a  suggestion  was  made,  at  an  interview  at  which  Cole  was  pre- 
sent, which  resulted  in  Gordon  giving  a  promissory  note  for  £120,000  to 
Messrs.  Overend  and  Gurney,  which  Mr.  Chapman  took,  not  probably 
imagining  that  it  would  turn  to  much  profit.  After  that,  however,  the 
deeds  relating  to  the  distillery,  which  had  been  previously  deposited  with 
Mr.  Ificholson,  were  given  as  an  additional  collateral  security  to  Messrs. 
Overend  and  Gurney,  and  from  that  time  to  the  time  of  the  bankruptcy  no 
disclosure  was  made  of  the  fact  of  these  transactions.  There  was  no  doubt 
whatever  that,  in  consequence  of  this,  Gordon,  who  had  admitted  himself 
to  be  a  dealer  in  warrants  of  this  description,  and  to  be  concerned  in  one  of 
the  greatest  frauds  which  ever  occurred  in  the  City  of  London,  was  allowed 
to  carry  on  business,  and  did  carry  it  on  successfully,  in  good  reputation, 
and  with  fair  credit.  During  that  time  the  prisoner  was  in  constant  com- 
munication with  Mr.  Chapman ;  he  was  known  to  be  connected  with  the 
large  house  of  Overend  and  Gurney.  The  credit  of  hiaiself  and  partner  was 
maintained  in  the  City  of  London,  and  they  were  enabled  to  perpetrate  fresh 
frauds,  in  consequence  of  the  credit  which  was  assigned  to  them  by  Messrs. 


FACTS,   rAlLTTEES,   A>-D   mAUDS.  213 

Orcrcnd  and  Gurney,  and  their  neglecting  to  mate  known  tlie  important 
matters  to  wliich  he  had  referred.  Ho  could  not  but  regret  that  this  course 
of  proceeding  had  been  adopted,  because  it  had  enabled  Gordon  to  carry  on 
business  for  a  longer  time  than  he  could  otherwise  have  done  ;  and  it  would 
be  proved  that  other  warrants  of  the  same  kind  continued  to  be  deposited 
by  him,  until  the  period  arrived  when  he  and  his  partner  could  carry  on 
their  affairs  no  longer.  Three  or  four  days  previously  to  the  17th  of  June, 
1854,  the  prisoner  found  himself  in  great  embarrassment.  A  largo  amount 
of  money  was  then  due  to  the  Excise  for  duty,  and  it  was  evident  that  at 
that  time  Gordon  and  Davidson  undoubtedly  contemplated  absconding,  for 
they  had  a  great  quantity  of  spirits  removed  from  the  distillery,  upon  wliich 
they  obtained  advances  to  the  amount  of  £3000.  The  Excise  officer  was 
unwilling  to  allow  the  spirits  to  leave  the  distillery  until  the  debt  owing  to 
the  Excise  was  discharged  ;  but  upon  a  cheque  for  £7000  odd  being  given, 
the  spirits  were  permitted  to  go.  That  cheque,  of  course,  was  never  met. 
Upon  the  I7th  of  June  the  prisoner  and  Davidson  went  to  Dover.  They 
both  were  seen  on  board  the  Ostend  boat,  and  they  did  not  return  to  this 
country  until  brought  here  by  the  "  Indus,"  when  they  were  compelled  to 
leave  Malta.  A  commission  in  bankruptcy  was  sued  out ;  inquiries  were 
made,  and  all  the  available  assets  were  found  to  be  about  £2000,  which 
Gordon  had  handed  over  to  Mr.  Elmslie,  his  attorney.  These  were  the 
assets;  and  the  debts  unsecured  which  they  had  incurred,  including  that 
due  to  Overend  and  Gurney,  and  other  debts  upon  fictitious  warrants, 
amounted  to  the  enormous  sum  of  £500,000.  The  prisoner  and  his  partner, 
after  arriving  at  Ostend,  went  to  Brussels,  thence  to  ALx-la-Chapelle,  and 
they  soon  found  themselves  in  Neufchatel.  As  there  was  no  extradition- 
treaty  in  existence  with  Neufchatel,  they  would  not  have  been  delivered  up 
in  the  ordinary  course  of  things  by  the  Government  of  Switzerland  to  the 
Government  of  this  country ;  but  as  there  were  bills  out  which  had  been 
drawn  by  the  prisoner,  they  were  put  into  the  hands  of  inhabitants  of  Neuf- 
chatcl,  who  took  proceedings  upon  them.  The"  prisoner  and  his  partner 
then  went  to  Geneva,  and  ultimately  to  Naples.  At  Naples  they  were 
delivered  up  to  the  Government,  and  in  ^lay  they  were  taken  to  Malta* 
where,  however,  owing  to  some  technical  objection  to  the  form  of  the  war- 
rant, they  were  discharged  by  the  magistrate.  An  English  officer  was  there 
in  attendance.  The  accused  were  obliged  to  leave  Malta,  and  on  their 
arrival  at  Southampton  they  were  taken  into  custody.  He  had  now,  he 
believed,  laid  the  principal  facts  before  the  jury.  Upon  the  subject  of  the 
non-surrender  there  could,  of  course,  be  no  question,  and  ho  apprehended 
that  the  circumstances  connected  with  the  fictitious  warrants,  and  with  the 
dealings  of  these  persons  generally,  would  leave  no  doubt  upon  the  minds 
of  the  jury  that,  in  endeavouring  to  get  away  from  this  country,  the  prisoner 
had  done  so  with  a  full  consciousness  of  the  frauds  of  which  he  had  been 


214  TACTS,    TAILURES,   AKD   PEAUDS. 

guilty.  In  conclusion,  lie  -n-ould  only  observe  that  this  was  a  case  of  the 
very  deepest  importance,  both  from  the  character  and  magnitude  of  the 
transactions,  and  from  the  mode  in  ■which  the  frauds  had  been  mixed  up 
with  other  parties.  In  a  great  commercial  community  like  tliis,  where 
credit  was  the  soul  of  business,  that  credit  must  be  maintained  at  aU 
hazards,  cr  the  high  character  of  this  country  in  mercantile  transactions 
would  be  materially  damaged,  a  result  which  would  be  certain  to  ensue  if 
it  should  appear  that  the  law  was  incapable  of  deaUng  with  great  offenders 
of  the  class  now  before  the  Court. 

Tlie  following  evidence  was  then  adduced : — 

Mr.  Thomas  Hamber,  a  messenger  in  the  Court  of  Bantruptcy  under 
Mr.  Commissioner  Goulburn,  produced  the  bankruptcy  proceedings  in  the 
case  of  "Davidson  and  Gordon."  The  petition  was  filed  on  the  20th  of 
June,  1854,  by  John  M'Millen,  of  the  City  of  Glasgow,  as  the  petitioning 
creditor. 

Mr.  Chambees  took  an  objection  to  the  reception  of  these  documents 
in  evidence,  on  the  ground  that  erasures  appeared  upon  them,  and  the  name 
of  the  county  appeared  to  have  been  altered  fj'om  Middlesex  to  Essex,  and 
there  was  no  evidence  to  show  that  these  alterations  had  been  made  by 
proper  authority, 

Mr.  Justice  Eele,  after  some  discussion,  said  he  should  receive  the 
evidence,  as  it  bore  the  seal  of  the  Court,  but  he  would  reserve  the  point 
for  further  consideration  if  it  should  become  necessary. 

The  petition  and  the  other  documents  were  then  put  in  and  read.  The 
prisoner  and  his  partner  were  adjudicated  bankrupts  on  the  21st  of  June, 
1854. 

Mr.  Hamber,  on  further  examination,  said  that  on  the  21st  of  June  he 
served  a  duplicate  notice  of  the  adjudication  of  bankruptcy  at  the  offices  of 
the  bankrupts  in  Mincing  Lane.  He  saw  a  person  there  whom  he  supposed 
to  be  the  bankrupts'  clerk. 

Mr.  Chambees  said  this  would  not  do.    There  must  be  proof  that  this 
person  actually  was  the  bankrupts'  clerk. 

Examination  continued. — Mr.  George,  the  clerk  to  Mr.  Linklater,  the 
solicitor  to  the  petition,  accompanied  him  when  he  r-erved  the  notice.  The 
witness  then  produced  a  copy  of  the  London  Gazette  of  the  30th  of  June, 
1854,  in  which  the  bankruptcy  was  published. 

Mr.  Chambees  objected  to  the  reception  of  the  Gazette  as  evidence, 
on  the  ground  that  it  described  the  bankrupts  as  of  West  Ham,  Middlesex, 
whereas  in  the  bankruptcy  proceedings  they  were  described  as  of  West 
Ham,  Essex,  and  he  contended  this  was  a  fatal  variance,  and  that  there  had 
been  no  legal  notice  under  it. 

His  Lordship  admitted  the  evidence.  The  days  appointed  for  the  sur- 
render of  the  bankrupts  were  the  7th  of  July  and  the  19th  of  August,  and 


FACTS,    FA-TLrBES,    AND   FRAUDS.  215 

it  appeared  upon  the  procecdiugs  that  neither  of  the  defendants  surrendered 
on  either  of  those  days. 

In  answer  to  questions  put  by  Mr.  Chambebs,  the  witness  said  he  was 
not  sure  that  the  Court  of  Bankruptcy  sat  on  the  7th  of  July,  or  whether 
Mr.  Goulburn  or  Mr.  Fonblanquc  sat  on  the  19th  of  August. 

Cross-eiamined. — Witness  was  a  messenger  in  Mr.  Commissioner  Goul- 
burn's  court.  He  went  to  Mincing  Lane,  accompanied  by  the  clerk  to  the 
solicitor  to  the  petition.  He  only  left  one  document.  He  did  not  give  it 
to  any  person,  but  left  it  in  the  counting-house  in  the  usual  way. 

Mr.  F.  George,  managing  clerk  to  Messrs.  Linklater,  said,  he  accom- 
panied the  last  witness  to  a  place  which  he  knew  to  be  the  counting-house 
of  Messrs.  Davidson  and  Gordon,  in  Mincing  Lane,  and  he  saw  him  leave 
the  notice  of  the  adjudication  of  bankruptcy  there.  He  produced  a  copy 
of  the  notice  he  said  he  had  served  that  morning  upon  the  prisoner  Gordon, 
calling  upon  him  to  produce  the  document  that  was  left  at  his  counting- 
house  on  the  21st  of  June. 

By  Mr.  Chambees — At  the  time  he  served  the  notice  upon  him,  he  had 
pleaded  to  the  present  charge.  He  had  been  in  custody  since  April,  and 
had  been  examined  by  the  magistrate  a  great  many  times. 

William  Haggis  deposed,  that  on  the  25th  of  July  he  served  a  notice  at 
the  counting-house  in  Mincing  Lane  of  the  days  on  which  the  bankrupts 
were  to  surrender.  He  afterwards  made  a  search  among  the  papers  of  tho 
bankrupts,  but  ho  could  not  find  the  notice  he  had  left  among  these  papers. 

By  Mr.  Chambebs — Witness  had  the  keys  of  the  premises,  and  he  un- 
locked the  door  and  placed  the  notice  on  the  mantel-shelf.  He  then  locked 
up  the  place  and  went  away.  The  assignees  took  possession  of  all  tho 
books  and  papers. 

Mr.  George  was  recalled,  and  was  examined  at  considerable  length  by 
Mr.  Chambebs,  with  reference  to  tho  time  when  the  alterations  were  made 
in  the  bankruptcy  papers,  and  he  declared  that  the  alterations  were  made 
upon  the  discovery  of  the  mistake  in  the  county  of  Middlesex  for  Essex, 
before  the  papers  were  signed  by  the  commissioner. 

Mr.  Ballaktike  then  proposed  to  put  in  evidence  copies  of  the  notices 
that  were  served  at  the  counting-house  of  the  bankrupts,  upon  the  ground 
that  the  originals  were  lost,  or  that  at  least  there  was  suOIcicnt  evidence 
of  the  fact  to  justify  the  reception  of  secondary  evidence  of  their  con- 
tents. 

Mr.  Chambebs  objected  to  the  reception  of  the  evidence,  and  con- 
tended that  the  notice  which  had  been  served  upon  the  prisoner  that 
morning,  was  not  given  in  reasonable  time  to  enable  him  to  produce  the 
document,  supposing  even  it  had  been  proved  to  have  been  in  his  pos- 
session, and  that  the  evidence  that  had  been  adduced  was  not  sufBcient  to 
•how  that  the  documents  had  been  lost,  and  that  to  a  certain  extent  it 


216  TACTS,   FAILUKES,   AIS'D   TEAUDS. 

negatived  the  possibility  of  the  documents  having  ever  come  into  the  pos- 
session of  the  prisoner. 

The  Court,  without  hearing  jlr.  Ballantinc,  ruled  that  the  secondary 
evidence  was  admissible. 

Mr.  Chambeks  then  said,  as  it  would  now  be  assumed  that  a  summons 
to  surrender  had  been  proved,  he  should  submit  that  where  there  was  a 
joint  fiat,  a  single  notice  was  not  sufficient.  It  might  happen,  where  there 
were  several  partners,  that  one  of  them  might  take  the  notice,  and  tho 
others  be  perfectly  ignorant  of  such  a  notice  being  in  existence  ;  and  yet  if 
one  notice  was  held  to  be  sufBcient,  they  would  be  liable  to  all  the  highly 
penal  consequences  enacted  by  this  statute. 

Mr.  Justice  Eele  said  he  would  reserve  this  point  for  further  con- 
sideration, with  any  of  the  others  which,  upon  deliberation,  he  should 
consider  tenable. 

Mr.  Cliectetts,  a  clerk  in  the  Bankruptcy  Court,  proved  that  neither  of 
the  defendants  attended  on  the  days  appointed  for  their  examination,  and 
that  they  were  proclaimed  in  the  usual  course. 

The  notices  then  were  formally  put  in,  and  read ;  and  ilr.  Chambers 
took  another  objection  to  the  notice  to  surrender — that  it  referred  to  a 
bygone  day — namely,  the  7th  of  July,  it  being  proved  to  have  been  served 
on  the  25th  of  July.  He  urged  that  it  was  a  misleading  and  equivocal 
summons,  and  that  the  bankrupts  were  not  bound  to  pay  attention  to  it. 

Mr.  Justice  Eele  said  that  this  objection  should  also  receive  con- 
sideration. 

Mr.  Charles  Walker  deposed  that,  previously  to  June,  1854,  he  had 
been  three  years  managing  clerk  to  the  prisoners'  firm.  They  were  colo- 
nial brokers  and  metal  agents,  and  also  carried  on  the  business  of  distillers 
at  "West  Ham  for  nine  or  ten  months.  He  did  not  know  when  they  left 
England,  but  he  did  not  see  them  after  the  Ivtli  of  June,  1854.  He  had 
examined  the  books  since  the  bankruptcy  with  an  accountant,  and  bad 
ascertained  that  there  were  large  liabilities  outstanding.  He  heard  tho 
prisoner  say,  about  the  month  of  June,  that  there  was  a  large  sum  due  to 
the  Excise  on  account  of  the  distillery.  After  the  prisoner  and  his  partner 
left,  witness  had  no  means  of  carrying  on  the  business,  and  no  money  was 
left  with  him.  He  was  aware  that  the  bankrupts  had  dealings  with  Mr. 
M'Millen,  of  Glasgow,  and  that  they  received  goods  from  him.  Some 
cheques,  he  believed,  were  given  in  payment  of  the  amount  due  to  the 
Excise.  Mr.  Gordon,  the  prisoner,  signed  those  cheques.  The  offices 
were  opened  on  the  19th,  and  he  expected  to  see  the  prisoner  on  that 
day;  but  he  did  not  see  him  any  more  until  he  was  in  custody.  No 
business  of  any  kind  was  transacted  after  the  17th  of  June. 

Cross-examined. — ^^utness  had  nothing  to  do  with  the  distUlery.  He 
was  engaged  in  the  office  in  Mincing  Lane.     There  was  a  balance  at  the 


FACTS,    FAILURES,   AND    FBAXn)S.  217 

bankers'  on  Friday,  the  16tli  of  Juno.  The  prisoner  carried  on  a  very  ex- 
tensive business.  The  bankruptcy  messenger  came  on  the  Elst  of  June, 
and,  after  that  day,  the  counting-house  was  closed. 

Mr.  Samuel  Davis,  agent  for  Mr.  M'Millen,  of  Glasgow,  and  other 
manufacturers,  proved  that  in  May  the  prisoner  gave  liim  three  orders  for 
goods,  to  the  amount  of  £2000.  A  portion  of  these  goods  was  to  be  sup- 
pUcd  by  Mr.  M'Millcn.  The  value  of  that  portion  was  £12G  Gs.  On 
Saturday,  the  17th  of  June,  witness  went  to  tho  prisoner's  counting-houso 
in  Mincing  Lane,  and  saw  tho  prisoner,  but  did  not  get  any  money.  Ho 
went  again  on  the  Monday,  and  found  that  tho  prisoner  and  Mr.  Davidson 
had  left,  and  he  could  get  no  information  respecting  them. 

Cross-examined. — The  arrangement  with  tho  prisoner  was,  that  the 
goods  should  be  paid  for  by  half  cash  in  a  mouth,  and  the  balance  in  three 
months. 

Mr.  M'Millen  deposed  that  he  authorized  the  goods  in  question  being 
sent  to  Messrs.  Davidson  and  Gordon  in  May,  1854,  and  he  had  never 
been  paid  for  them. 

Mr.  D.  B.  Chapman  was  the  next  witness.  He  said — I  am  one  of  the 
firm  of  Overend,  Gurney,  and  Co.  Wo  are  money  dealers.  I  know  the 
prisoner.  I  first  knew  him  when  he  carried  on  another  business  in  1817. 
He  made  some  composition  with  his  creditors  at  that  time.  Down  to  1853 
our  house  made  several  advances  of  money  to  him  upon  warrants  for  metal 
of  difierent  descriptions.  In  October,  1853,  in  consequence  of  something 
that  o<"Currcd,  I  sent  for  the  prisoner,  and  he  came,  accompanied  by  Mr. 
Cole,  to  whom  we  had  also  advanced  money.  The  sum  we  had  advanced 
at  this  time  upon  warrants  was  about  £80,000,  and  we  have  never  received 
any  portion  of  it.  Colo  had  given  me  some  information  about  tho  war- 
rants, at  an  earlier  part  of  the  day.  I  had  some  conversation  with  tho 
prisoner  about  the  warrants,  and  I  told  him  what  I  had  heard  from  Cole. 
I  cannot  recollect  exactly  what  passed,  but  my  principal  object  was  to  know 
to  what  depth  we  were  involved. 

Mr.  Chaubees  having  interposed,  the  witness  said  he  did  not  think 
he  would  object  to  what  he  was  going  to  say,  as  it  was  nothuig  against  hia 
client. 

Examination  continued. — I  had  heard  that  Gordon's  warrants  were  of 
no  more  value  than  those  I  had  received  from  Cole,  which  he  admitted 
were  worthless  ;  and  I  have  no  doubt  that  I  broached  this  subject  to  tho 
prisoner,  and  asked  him  if  it  was  true  what  I  had  heard.  Tho  effect  of 
what  took  place,  was  to  certify  to  us  that  we  had  been  defrauded  of  a  great 
deal  of  money.  I  do  not  think  that  I  said  to  Gordon  that  he  was  a  thief. 
It  is  not  likely  that  I  should  have  done  so.  Colo  was  the  per-son  whom  I 
considered  to  havo  been  the  guilty  party  at  that  time.    I  took  down  from 


218  TACTS,   FAILrCES,   A^'D   FEArDS. 

the  prisoner  a  full  statement  relating  to  the  distillery,  but  I  do  not  think  I 
asted  him  for  any  information  about  the  warrants. 

Mr.  BALLAyiiNE. — Why  did  you  send  for  him,  then  ? 

Witness. — We  wished  to  know  his  connection  with  the  warrants,  and 
the  depth  to  which  we  were  involved,  and  I  found  that  out  very  soon. 
Cole  told  me  that  there  was  no  property  at  the  wharf,  which  was  supposed 
to  be  represented  by  the  warrants,  and  upon  which  we  had  advanced 
£80,000.  The  prisoner  gave  me  a  bill  of  exchange  for  £120,000  upon  this 
occasion.  It  was  made  payable  on  demand,  and  was  drawn  by  Davidson 
and  Grordon,  aud  endorsed  by  Cole.  That  bill,  of  course,  has  never  been 
paid.  On  the  following  day,  I  received  some  deeds  relating  to  the  dis- 
tilleiy  from  the  prisoner  Gordon,  I  swear  that  nothing  was  said  about 
those  deeds  until  the  time  when  they  were  placed  in  my  possession. 

Mr.  CHAiiBEES  here  objected  that  all  these  matters  were  quite  irrele- 
vant to  the  issue,  and  were  merely  calculated  to  cast  a  very  serious  preju- 
dice upon  the  witness. 

Mr.  Justice  Eele  said  he  could  hardly  decide  that  the  matter  was  not 
relevant,  but  it  was  certainly  a  long  way  from  the  question  of  the  bank- 
ruptcy. 

Examination  continued. — I  never  received  the  deeds  as  security,  and  I 
gave  them  up  when  Cole  was  made  bankrupt. 

Cross  examined. — Mr.  Gordon  said  he  expected  to  be  able  to  arrange 
all  his  difficulties.  The  profits  of  his  business  were  represented  to  be 
between  £30,000  and  £40,000  a-year  at  this  time. 

Mr.  Thomas  Webb  said — I  was  the  owner  formerly  of  the  distillery  at 
West  Ham,  and  parted  with  my  interest  in  it  to  Messrs.  Davidson  and 
Gordon,  I  remember  seeing  the  prisoner  in  October,  1853,  and  he  told 
me  that  he  had  told  Mr.  Chapman  everything.  I  asked  him  what  he 
meant  by  "  everything,"  and  he  said  he  had  had  large  advances  of  money 
from  Overend  and  Gurney  upon  warrants,  and  that  the  goods  had  not 
been  paid  for,  and  had  been  taken  away,  and  he  was  obliged  to  acknow- 
ledge that  he  owed  Cole  £120,000.  I  asked  him  if  he  did,  and  he  said  he 
did  not.  I  asked  him  what  Mr.  Chapman  said  to  this,  and  he  said  Mr. 
Chapman  told  him  he  had  always  looked  upon  him  as  an  upright  man,  and 
was  sorry  to  find  that  he  was  otherwise.  He  also  said  that  Mr.  Chapman 
said  that  what  had  taken  place  on  the  previous  night  between  them  was  to 
be  kept  secret. 

Cross-examined. — Witness  was  indebted  to  the  prisoner's  firm  on  ac- 
count of  the  distillery  to  a  very  large  amount,  but  not  to  the  amount  of 
£180,000.  He  could  not  state  within  £10,000  what  the  amount  of  the 
debt  actually  was.  Witness  was  indebted  to  them  to  a  very  large  amount, 
and  they  took  to  the  distillery  against  his  will. 


FACTS,    rATLUBlS,  AlTD  FHAUBS.  219 

Evidence  ^as  then  adduced  to  show  that  the  prisoner  had  obtained 
lar^e  sums  of  money  by  the  deposit  of  fraudulent  warrants  for  metals  from 
different  mercantile  firms  up  to  the  month  of  February,  1854.  It  was 
al30  shown  that  the  firm  owed  to  one  creditor  a  sum  of  £9000  for  copper, 
and  that  they  had  deposited  warrants  which  turned  oat  to  be  perfectly 
worthless  for  the  amount.  It  also  appeared  that  on  the  day  the  prisoner 
and  his  partner  absconded,  they  disposed  of  spirits  to  the  amount  of 
£2600,  and  obtained  possession  of  the  cash  ;  and  that  they  gave  cheques 
to  the  superrisor  of  excise  for  £7000  odd  for  the  duty,  when  it  turned  out 
that  they  had  no  cash  at  the  banker's  to  meet  them.  Evidence  was  also 
given  of  their  having  been  at  Geneva  and  Neufchatel,  and  that  they  en- 
deavoured to  obtain  a  permission  to  reside  at  that  place,  which  was  refused, 
and  that  they  then  proceeded  to  Malta,  from  which  place  they  returned  to 
England,  where  they  were  taken  into  custody. 

The  case  for  the  prosecution  being  brought  to  a  close  by  this  evidence, 

Mr.  Ceasibees  inquired  what  was  the  act  of  bankruptcy  upon  which 
they  relied  ? 

Mr.  BiLLAimKE  refused  to  satisfy  the  learned  comisel  on  this  point. 

Mr.  Chambebs  then  proceeded  to  submit  to  the  judge  various  tech- 
nical objections,  which  he  requested  his  lordship  to  reserve.  In  the  first 
place,  he  contended  that  no  act  of  bankruptcy  had  been  clearly  proved  to 
have  been  committed.  The  adjudication  took  place  either  upon  the  20tli 
or  21st,  and  upon  these  days  it  seemed  that  the  bankrupts  were  not  at 
their  counting-house,  but  their  clerks  were ;  and  if  the  bankrupts  had  re- 
turned, it  was  clear  that  the  mere  fact  of  their  absence  upon  those  days 
would  not  have  constituted  an  act  of  bankruptcy.  With  regard  to  their 
departure  from  the  realm,  the  act  required  that  that  should  be  done  with  a 
view  to  defeat  or  delay  their  creditors ;  and  he  submitted  there  was  no 
evidence  that  they  had  quitted  the  realm  with  that  intention.  Another 
point  which  ho  suggested  was  this — The  prisoner  being  abroad,  did  any- 
thing which  he  omitted  to  do,  which  was  required  by  the  statute,  consti- 
tute an  offence  against  the  English.  Bankruptcy  Aot,  when,  in  fact,  it  was 
an  offence  committed  beyond  the  realm  ? 

Mr.  Ballaxtibs  said  that  the  offence  was  committed  at  the  place 
where  the  prisoner  did  not  surrender,  as  he  was  bound  to  do  by  the  law. 

The  Court  thought  that  the  view  taken  by  Mr.  Ballautine  was  the 
correct  one.  He  would  reserve  the  points  which  the  learned  counsel  bad 
referred  to,  although  he  did  not  attach  much  weight  to  them. 

Mr,  Chambees  then  proceeded  to  address  the  jury.  Ho  said  that,  in 
truth  and  in  seriousness,  this  case  resolved  itself  into  various  difficult  and 
doubtful  questions  of  law,  founded  upon  what  he  might  call  the  equity 
and  justice  of  the  bankruptcy  laws.  It  would,  he  thought,  be  extremely 
useful  if  the  jury  would  find,  according  to  the  evidence,  whether  it  was 


220  TACTS,   FAILTJEES,   A^D   FEArDS. 

possible  that  the  prisoner  could  have  had  the  actual  knowledge  conveyed 
to  his  mind  of  the  duplicate  of  adjudication,  and  of  the  summons  to  sur- 
render. He  solicited  them  to  find  upon  that  issue,  because  it  appeared  to 
him  to  be  a  most  extraordinary  proceeding  that  a  man  with  the  common 
privileges  of  Englishmen  should  be  called  upon  to  do  an  act  by  summons, 
and  that  it  should  be  sufficient  to  place  that  summons  in  such  a  position 
that  it  would  be  impossible  for  the  man  to  see  it.  In  order  to  establish 
the  charge  laid  in  the  indictment — that  the  prisoner  omitted  to  surrender, 
with  the  intention  of  defrauding  his  creditors — it  ought  to  be  clearly 
shown  that  he  had  a  knowledge  tliat  he  had  been  adjudged  a  bankrupt, 
and  that  he  had  been  called  upon  to  surrender  by  a  summons  witliin  a 
given  time.  It  had  been  decided  long  ago  that  a  bankrupt's  omission  to 
surrender  was  not  a  felony  unless  it  were  wilful.  He  submitted  that  the 
prisoner  had  no  knowledge  when  he  went  abroad  that  bankruptcy  was 
either  inevitable  or  likely,  and  stiU  less  that  a  fiat  in  bankruptcy  had  been 
issued.  It  must  be  remembered  that  the  distillery  was  an  enormous  con- 
cern, paying  £7000  every  week  in  Excise  duty,  and  yielding  profits  to  the 
extent  of  between  £40,000  and  £50,000  a-year.  The  probability  was, 
therefore,  that  Mr.  Gordon  was  abroad,  expecting  that  each  day  might 
bring  him  a  telegraphic  message  informing  him  that  he  was  no  bankrupt, 
and  was  not  likely  to  become  a  bankrupt,  for  his  business  was  of  such  a 
nature  that  a  few  successful  transactions  might  have  restored  him  to 
splendid  riches.  In  the  criminal  law  nothing  was  to  be  assumed,  and  the 
jury  could  not  take  it  for  granted  that  the  prisoner  went  abroad  with  any 
intention  to  defraud  his  creditors,  and  with  a  determination  not  to  sur- 
render; neither  could  they  say  that  the  bankrupt  had  refused  to  surrender 
in  wilful  disobedience  of  an  order  of  which  he  had  never  been  made 
aware. 

Mr.  Justice  Eele,  in  summing  up,  said  that  this  was  rather  an  unusual 
prosecution,  and  of  some  considerable  importance.  The  ofience  was  that 
of  not  surrendering  in  bankruptcy,  and  he  should  tell  the  jury  that  it  was 
the  duty  of  a  trader  becoming  bankrupt  to  surrender ;  and  that,  if  he  did 
surrender,  an  advantage  was  conferred  upon  the  creditors,  who  were  then 
in  a  position  to  make  him  give  a  full  account  of  his  transactions  and  his 
property.  He  should  give  the  jury,  in  three  short  heads,  the  items  to  be 
established  before  they  could  find  the  prisoner  guilty.  They  were — first, 
that  he  was  a  bankrupt  ;  next,  that  the  requisite  papers  had  been  left 
according  to  the  Act  of  Parliament;  and,  thirdly,  that  he  had  omitted  to 
appear,  with  intent  to  defraud  his  creditors.  With  regard  to  the  first  item, 
there  could  be  no  doubt  that  the  prisoner  was  a  trader.  Then,  being  a 
trader,  many  things  constituted  an  act  of  bankruptcy.  One  was,  absenting 
himself  from  his  place  of  business ;  another  was,  absenting  himself  from 
the  realm ;  and,  if  he  did  either  of  these,  with  intent  to  defeat  or  delay 


TACTS,   FAILUBES,   AXD   FEAUD8.  221" 

Ma  creditors,  he  committed  an  act  of  bankruptcy.  The  circumstances  of 
this  case  were,  that,  being  in  considerable  embarrassments,  the  prisoner, 
upon  the  I7th  of  June,  without  any  notice  to  liis  clerks,  or  leaving  any 
address,  or  affording  any  means  of  finding  him,  suddenly  quitted  the 
country.  Persons  going  to  the  counting-house  found  both  jjartners  gone, 
and  no  trace  of  them  left  behind.  These  were,  he  thought,  very  strong 
eyidences  of  an  act  of  bankruptcy.  Then  came  the  second  question.  Sup- 
posing him  to  be  a  bankrupt,  had  all  the  necessary  papers  requiring  him 
to  attend  and  surrender  been  duly  left  according  to  Act  of  Parliament  ? 
The  act  required  that  the  duplicate  adjudication  and  the  summonses  to 
appear  should  be  cither  served  personally,  or  left  at  the  last  place  of 
business.  There  was  ample  proof  that  both  these  documents  had  been  left 
at  the  last  place  of  business.  No.  14,  Mincing  Lane.  Notwithstanding  the 
formal  objection  which  had  been  taken,  and  which  he  should  reserve,  that 
appeared  to  him  to  be  a  sufficient  service,  according  to  the  spirit  of  the 
Act.  By  the  introduction  of  the  words  "  last  place  of  business,"  the  law 
clearly  contemplated  bankrupts  who  were  absconding  from  their  creditors, 
and  were  not  to  bo  met  with.  He  was,  therefore,  of  opinion,  that  the  law 
was  satisfied  if  the  notices  were  left  at  the  last  place  of  business ;  and  that 
this  had  been  done  there  was  no  doubt.  Then  came  the  third  question. 
Did  the  prisoner  omit  to  surrender  on  the  19tb  of  August,  with  intent  to 
defraud  his  creditors  ?  He  (the  learned  judge)  was  of  opinion  that  tho 
creditors  would  be  defrauded,  and  that  a  person  must  be  taken  to  intend  to 
defraud  his  creditors,  if  he  purposely  stayed  away  to  avoid  an  examination, 
and  the  responsibiUties  which  he  would  incur  if  he  surrendered.  If,  then, 
the  prisoner  believed  that  he  was  a  bankrupt,  and  stayed  away  upon  the 
the  19th  of  August,  in  order  to  deprive  the  creditors  of  their  right  and 
privilege  to  examine  him,  he  (the  learned  judge)  was  of  opinion  that  such 
staying  away  would  be  with  intent  to  defraud,  and  would  justify  the  jury 
in  finding  a  verdict  of  guilty  upon  that  head.  So  fer  as  Mr.  Chapman's 
oridence  went,  ho  thought,  perhaps,  that  up  to  October,  1853,  the  bank- 
rupt was  more  "  sinned  against  than  sinning ;"  because  Cole  appeared  to 
have  lent  him  certain  spelter-warrants,  and  afterwards  to  have  withdrawn 
the  metal.  It  was  in  evidence,  however,  that  so  late  as  February,  1854, 
the  prisoner  continued  to  deposit  these  warrants,  and  in  that  month  he 
received  from  one  witness  alone  £8000,  upon  a  security  of  £10,000  or 
£11,000  worth  of  spelter-warrants,  which  there  was  no  metal  to  represent. 
These  were  matters  which,  no  doubt,  the  creditors  would  have  been  ex- 
tremely anxious  to  have  inquired  into  if  the  bankrupt  had  surrendered,  but 
which,  owing  to  his  non-surrender,  they  had  not  been  able  to  investigate. 
After  briefly  alluding  to  the  sudden  departure  of  the  prisoner  from  England, 
on  the  17th  of  June,  the  rapid  conversion  of  spirits  into  money,  and  the 
circumstance  of  quitting  the  realm  without  informing  his  clerk,  or  leaving 


222  TACTS,   PAILrEES,   AITD   FEArDS. 

any  address  behind  him,  all  wliich  things  were,  he  said,  fraught  with  sus- 
picion, his  Lordship  informed  the  jury  that  if  they  were  of  opinion  that 
the  prisoner  had  omitted  to  surrender,  with  intent  to  defraud  his  creditors, 
the  whole  requirements  of  the  statute  would  be  comphed  with.  If  they 
believed  that  the  three  requisites  which  he  had  mentioned  were  proved, 
they  would  find  the  prisoner  guilty;  but  if  either  of  them  was  left  in 
reasonable  doubt,  they  would  acquit  him. 

The  jury  almost  immediately  returned  a  verdict  of  Guilty, 
Mr.  BaTiTiAntike  then  said  there  was  a  charge  against  the  prisoner's 
partner  Davidson,  in  which  the  evidence  would  be  precisely  the  same,  and 
the  same  objections  would,  no  doubt,  be  taken  as  those  that  were  reserved 
for  consideration  in  the  present  case.  It  therefore  appeared  to  him  that  it 
would  be  a  useless  waste  of  time  to  go  into  that  indictment,  and  that  it 
would  be  better  that  it  should  stand  over  until  the  legal  points  were 
decided. 

Serjeant  Btles  said  that,  on  the  part  of  his  client,  he  saw  no  objection 
to  this  course,  and  all  the  other  charges  were,  consequently,  postponed. 


The  subsequent  proceedings  may  thus  be  condensed : — 
On  the  10th  Kovember  the  objections  were  argued  before  Lord  Chief- 
Justice  Jeevis,  Mr.  Baron  Paeke,  and  Justices  Eele,  Ceompton,  and 
WiiXES.  There  were  eight  objections  raised.  Firstly — That  all  the  docu- 
ments in  the  commission  had  been  altered.  Secondly — That  some  of  the 
proceedings  had  been  signed  by  one  commissioner,  and  some  by  another, 
whereas  the  Act  directed  that  a  petition  should  be  allotted  to  a  particular 
commiesioner,  and  that  that  petition  could  not  be  changed  without  the 
sanction  of  the  Lord  Chancellor.  Thirdly — That  notice  of  the  adjudication 
in  bankruptcy  had  not  been  served  upon  the  bankrupts — a  notice  having 
been  left  in  the  counting-house  which  had  been  the  bankrupts'  by  the  mes- 
senger of  the  Court  of  Bankruptcy,  which  was  in  charge  of  the  messenger, 
and  of  which  he  kept  the  key  j  and  it  was  not  shown  that  the  notice  had 
been  deUvered  to,  or  had  ever  come  to  the  knowledge  of  the  bankmpts. 
Tourthly — That  there  was  a  difference  in  the  description  of  the  bankrupts, 
as  contained  in  the  adjudication,  and  as  given  in  the  Gazette.  In  one, 
West  Ham  Lane  was  stated  to  be  in  the  county  of  Middlesex ;  in  the  other 
it  was  described  as  being  in  the  county  of  Essex.  Fifthly — That  the  sum- 
mons to  appear  had  been  signed  by  Mi\  Commissioner  Holroyd,  calling 
upon  them  to  appear  before  Mr.  Commissioner  Goidburn.  It  was  left  at 
the  counting-house  on  the  26th  of  July,  and  called  upon  the  bankrupts  to 
appear  upon  the  7th  of  the  same  month  and  the  19th  of  August,  it  being 
clear  that,  at  the  time  the  summons  had  been  left,  the  date  first-named  for 
their  appearance  had  long  since  passed.    Sixthly — That  the  bankrupts  were 


TACTS,   FAILURES,   AND  rEAXIDS.  228 

called  upon  to  appear  before  Mr.  Commissioner  Qoulbum  on  the  19th  of 
August,  whereas  it  turned  out  that  that  learned  commissionor  did  not  pre- 
side upon  that  day,  and  the  bankrupts  being  summoned  to  appear  before 
Mr.  Commissioner  Goulbum,  and  not  before  "  the  Court,"  it  was  impos- 
sible they  could  comply  with  the  summons.  Seventhly — Tliat  the  fiot 
being  a  joint  fiat,  there  ought  to  have  been  a  duplicate  notice  issued  to  each, 
partner,  whereas  there  had  only  been  one  notice  left  at  the  counting-house. 
It  was  considered  of  great  importance  to  a  bankrupt  to  have  such  a  docu- 
ment in  his  possession,  as,  on  his  surrender  under  the  notice,  it  was  en- 
dorsed by  the  commissioner,  and  he  was  privileged  from  arrest.  The  eighth 
and  last  objection  was — That  there  was  no  such  proof  as  that  charged  in 
the  indictment,  that  the  bankrupts  were  cognizant,  before  leaving  the 
country,  that  a  fiat  had  been  issued  against  them  in  bankruptcy.  After 
protracted  arguments,  which  occupied  the  court  the  entire  day.  Chief  Jus- 
tice Jehvis,  in  delivering  the  judgment  of  the  court,  said,  with  respect  to 
all  the  points  raised,  except  the  seventh,  they  were  unanimously  of  opinion 
that  they  could  not  be  maintained  ;  but  that  as  regarded  the  seventh,  they 
were  of  opinion  that  a  duplicate  notice  of  the  adjudication  in  bankruptcy 
should  have  been  left  at  the  bankrupts'  counting-house,  but  that  not  having 
been  done,  the  requirements  of  the  Act  had  not  been  fulfilled.  Under  the 
circumstances,  therefore,  the  objection  was  valid,  consequently  the  convic- 
tion must  be  quashed. 

On  the  16th  December,  Davidson  and  Gordon  were  again  brought  up 
at  the  Central  Criminal  Court,  before  Baron  Aldebson  and  Justice  Cole- 
BLDGE,  to  plead  to  several  indictments  charging  them  with  misdemeanour 
and  felony.  The  case  gone  into  charged  the  prisoners  with  having,  after 
they  had  been  adjudged  bankrupts,  embezzled  and  secreted  a  portion  of 
their  estate  over  and  above  the  value  of  £10 — to  wit,  three  bank-notes  of 
the  value  of  £500  each — with  intent  to  defraud  their  creditors.  In  another 
count  they  were  charged  with  embezzling  money  to  the  amount  of  £2600 
with  the  like  intent.  It  was  proved  that  the  fiat  in  bankruptcy  was  issued 
on  the  2l8t  June,  1854 ;  that  the  prisoners  immediately  absconded,  taking 
with  them  the  notes  and  money  in  question.  These  notes  were  proved  to 
have  been  dealt  with  abroad,  and  were  in  a  few  days  transmitted  to  tliis 
country.  Upon  these  facts  Mr.  Baron  Aidebson  expressed  an  opinion 
that  the  evidence  did  not  support  the  charge  of  embezzlement,  as  there  was 
no  proof  that  the  three  £500  notes  had  ever  been  in  the  possession  of  the 
prisoners.  And  Mr.  Serjeant  Byxes  and  Mr.  CnAHBEBS,  on  behalf  of  the 
prisoners,  said  that  was  the  substantial  point  of  defence.  Another  point 
relied  upon  was,  that  it  was  never  intended  by  the  Legislature  that  a  charge 
of  embezzlement  should  be  tenable  on  such  facts,  it  being  quite  clear  that 
no  oficncc  could  be  committed  of  this  description  until  after  the  21st 
June,  when  the  fiat  of  bankruptcy  was  issued;  and  after  that  day  the  pri- 


224  PACTS,  TAIXUEES,  AKD  FEArBS. 

soners  were  abroad,  and  wliatcver  was  done  took  place  abroad,  consequently 
that  court  had  no  jurisdiction  in  such  a  case.  Mr.  Bai.la'Ntixe,  for  the 
prosecution,  admitted  that  he  could  not  support  the  charge  with  reference 
to  the  notes,  and  should  therefore  rely  upon  the  count  for  embezzling 
money,  which,  he  contended,  was  fully  made  out  by  the  expenditure  of 
money  in  the  different  hotels  in  which  the  prisoners  sojourned  after  the 
21st  June,  when  they  were  declared,  bankrupts.  Upon  which  Mr.  Baron 
AxDEESON  said  the  prisoners  were  charged  with  embezzling  money,  which 
meant  English  money.  The  CTidence  was,  that  they  had  expended  French 
and  other  foreign  money,  which  would  not  do.  Mr.  Justice  Coleeidge 
having  expressed  a  similar  opinion,  a  verdict  of  not  guilty  was  returned. 

On  the  19th  of  December,  the  prisoners  Davidson  and  Gordon  were 
again  placed  at  the  bar  of  the  Central  Criminal  Court,  charged  with  having, 
•within  three  months  of  their  bankruptcy,  obtained  from  certain  creditors 
goods  by  fraudulent  means  and  pretences,  with  intent  to  defraud  and  not 
to  use  in  the  way  of  bvisiness.  Evidence  was  given  to  the  effect  that  they 
obtained  goods,  on  the  25th  of  May,  from  a  Mr.  Beddoe,  to  the  amount  of 
£426 ;  on  the  12th  of  June,  from  Messrs.  Ogilvie,  Gilander,  and  Co.,  of 
Liverpool,  to  the  amount  of  £1500 ;  from  Messrs.  Pickford  and  Johnson, 
goods  valued  at  £800 ;  from  Messrs.  Alexander  they  obtained  about  £3500 
worth  of  goods ;  and  from  Mr.  Hesse,  of  Manchester,  about  £1400  worth 
of  goods ; — upon  all  of  which  it  was  proved  the  prisoners  immediately  raised 
money.  The  defence  was,  that  no  criminal  act  had  been  committed,  and 
that  however  blameable  the  conduct  of  the  prisoners  might  have  been,  the 
power  to  deal  with  them  was  vested  in  the  Commission  of  Bankruptcy. 
Mr.  Justice  Coleridge,  howevei-,  thought  differently,  and  the  jury  found  the 
prisoners  guilty.     Upon  which — 

Mr.  Justice  CoLEEiDaE,  addressing  them,  said  they  had  been  con- 
victed of  an  offence  of  a  very  serious  character  in  a  great  commercial 
community.  There  could  be  no  doubt  that  both  of  them  knew  very  well 
the  position  of  their  affairs  when  they  obtained  these  goods,  and  the  mis- 
chief of  such  a  course  of  proceeding  was  apparent,  and  that  innocent 
persons  must  be  the  sufferers.  It  was  clear  that  they  had  obtained  goods 
to  a  large  amount,  that  they  had  obtained  advances  of  large  sums  of  money 
upon  those  goods,  and  then  shipped  them  abroad  upon  the  chance  of  being 
able  to  pay  for  them.  Persons  had  no  right,  when  they  found  themselves 
to  be  insolvent,  to  speculate  with  other  persons'  property,  upon  the  mere 
chance  of  recovering  themselves,  and  still  less  to  do  so  in  order  to  make  a 
purse  for  themselves.  In  the  present  case,  he  saw  no  circumstances  of 
mitigation  to  call  upon  him  not  to  pass  the  extreme  sentence  of  the  law 
under  the  Act  of  Parliament  upon  which  the  indictment  was  framed,  and 
it  was,  therefore,  his  duty  to  pass  upon  them  the  full  sentence  of  the  law, 
which  was  that  they  be  imprisoned  and  kept  to  hard  labour  for  two  years. 


TACTS,  FAILTTEES,   AND   FRAUDS.  225 

On  tLo  6tli  of  Fobrunry,  1856,  Davidson  and  Gordon  and  Joseph 
Windle  Coh  were  placed  at  the  bar  before  Mr.  Justice  Wiglitman  and 
Mr.  Justice  Willes,  when  they  pleaded  not  guilty  to  an  indictment  charging 
them  with  a  conspiracy  to  obtain  goods  by  false  pretences.  Mr.  Wilde, 
Q.C.,  said  he  appeared,  with  his  learned  friend,  Mr.  Ballantine,  to  conduct 
this  prosecution  on  behalf  of  the  Corporation  of  the  City  of  London ;  but, 
after  an  attentive  consideration  of  all  the  circumstances,  they  were  both  of 
opinion  that  it  would  not  in  any  way  further  the  ends  of  justice  to  proceed 
with  the  present  indictment ;  and,  therefore,  with  the  sanction  of  their 
lordships,  he  should  refrain  from  offering  any  evidence.  The  Court  was 
probably  aware  that  three  indictments  had  originally  been  preferred  against 
the  defendants  by  order  of  the  Court  of  Bankruptcy,  and  all  the  de- 
fendants had  been  convicted,  and  two  of  them  were  sentenced  to  hard 
labour  for  two  years,  and  the  other  to  four  years'  penal  servitude.  The 
authorities  of  the  City  of  London  had  felt  it  their  duty  in  the  first  instance 
to  prefer  another  indictment,  in  case  there  should  have  been  a  failure  of 
justice  upon  the  other  three;  but  as  a  conviction  had  taken  place,  they  felt 
it  was  now  unnecessary  to  proceed  with  it. — Mr.  Justice  Wightman  said 
that  if  the  learned  counsel  took  upon  himself  the  responsibility  of  stating 
that  the  ends  of  justice  were  satisfied  by  what  had  already  taken  place,  the 
Court  would  offer  no  opposition  to  the  course  that  was  suggested. — Mr. 
Ballantine  observed  that,  even  in  the  event  of  a  conviction,  the  Court  could 
not  inflict  any  additional  punishment  upon  the  defendants. — Mr.  Justice 
Wightman  said  he  was  aware  of  that.  •  Any  fresh  sentence  would  be  con- 
current with  the  one  already  pronounced.— The  jury  then  returned  a  ver- 
dict of  Not  guilty,  as  regarded  each  of  the  defendants,  and  they  were  taken 
back  to  prifon.  i 


226  PACTS,    rAILUEES,   AJTD   TEAUDS. 


CHAPTEE    YI. 

THE   FBATTDS   AIJTD   FOBGEEIES    OF   JOHN   SADLEIE,    3I.P., 
A>"D    LATE    LOBD    OF   THE   TEEA8UET. 

His  History  and  Antecedents — Appearance  as  an  Irish  Member — Aban- 
donment of  Practice  as  an  Attorney,  and  Entrance  into  the  Arena  of 
Eailway  Excitement — His  Popularity  as  a  Man  of  Business — Accept- 
ance of  Seats  at  the  Boards  of  various  Companies — Connection  with, 
and  ultimate  Elevation  to,  the  Chairmanship  of  the  London  and  County 
Bank — His  Political  Career,  and  Appointment  as  a  Junior  Lord  of  the 
Treasury — Eesignation  of  that  Position,  and  his  ultimate  Decadence 
— His  Operations  in  the  Encumbered  Estates  Courts — The  Difficulties 
of  the  Tipperary  Bank,  and  the  Return  of  its  Drafts — The  Discovery 
of  his  Eorgeries,  and  the  Involvement  of  his  Eriends — His  Suicide,  and 
the  subsequent  Eevelations  respecting  his  various  Crimes. 

It  was  after  the  general  election  of  1847  that  the  name  of 
John  Sadleir  first  came  prominently  before  the  English  public. 
He  had  been  known  in  Ireland  for  some  years  before,  but  it 
does  not  appear  that  he  had  attained  to  any  distinguished 
position.  He  was  believed  to  be  a  zealous  Eoman  Catholic, 
and  in  consequence  he  was  selected  by  the  Irish  priesthood  as 
a  member  of  that  body  who,  under  the  name  of  the  Irish 
brigade,  were  returned  to  uphold  the  newly  constituted  hier- 
archy with  which  the  Pope  had  deigned  to  favour  the  British 
nation,  and  to  counteract  the  effect  of  Lord  John  EusseU's 
demonstration,  as  contained  in  his  celebrated  letter  to  the 
Bishop  of  Durham,  and  embodied  practically  in  the  Ecclesias- 
tical Titles  Act.  But  John  Sadleir  did  not  come  into  Parlia- 
ment to  serve  the  Pope  only.  Although  a  pious  Catholic, 
there  was  another  person  to  whom  he  saw  that  his  Parliamen- 
tary influence  might  be  useful,  besides  the  successor  to  St. 
Peter,  and  that  was  John  Sadleir  himself.     He  was  a  man  of 


FACTS,   FA1LT7EE3,  AJfD  PEAUDS.  227 

business,  of  ready  perception,  far-seeing,  persevering,  and  me- 
thodical, lie  knew  something  of  banking,  for  his  family  had 
been  bankers  for  at  least  one  generation.  He  was  punctual 
and  precise,  and  not  without  that  outward  show  of  liberality  in 
his  dealings  with  subordinates,  which  is  sure  to  command  good 
service.  He  had  beyond  all  these  another  qualification,  with- 
out which  the  highest  talents  frequently  remain  unproductive 
to  their  possessor,  and  to  the  world  —  he  had  the  power  of 
impressing  upon  others  a  high  opinion  of  his  own  value.  He 
was  not  the  man  to  hide  his  talents  under  a  bushel,  but  was  in 
an  eminent  degree  an  adept  in  the  difficult  art  of  displaying 
them  before  the  world  in  the  most  attractive  guise.  Of  the 
important  sway  which  the  Press  often  exercises  upon  the  for- 
tunes of  individuals,  as  well  as  upon  political  parties  and  public 
bodies,  he  was  fully  cognizant ;  nor  did  he  disdain  to  pay  court 
to  those  of  its  members  whose  good  word  spoken  at  the  right 
season,  and  in  the  right  quarter,  he  thought  might  tend  to  hia 
benefit.  In  Dublin  he  had  practised  as  a  solicitor,  having 
succeeded  his  uncle  in  a  respectable  and  lucrative  professional 
connection.  In  this  capacity  he  became  the  agent  for  nume- 
rous large  properties  in  Ireland,  and  when  the  Act  for  the 
establishment  of  the  Encumbered  Estates  Commission  came 
into  operation,  the  knowledge  he  had  thus  acquired  did  him 
essential  service,  and  enabled  him  to  operate  in  that  Court 
with  no  inconsiderable  profit  to  himself.  It  is  more  than 
probable  that  to  the  purchases  he  made,  or  was  supposed  to 
have  made,  in  this  way,  he  first  owed  his  reputation  for  wealth ; 
because,  although  his  professional  practice  was  a  good  one,  he 
had  followed  it  much  too  short  a  time  to  have  realized  any- 
thing like  an  independence  from  it ;  and  respectable  as  his 
family  was  for  ordinary  middle-class  people,  nobody  ever  sug- 
gested that  they  were  in  a  position  to  provide  more  than  the 
means  by  which  he  might,  with  industry  and  perseverance,  be 
enabled  to  earn  his  own  living,  and  maintain  his  station  as  a 


228  TACTS,   rAILITEES,   A>-D   rEATJDS. 

professional  man.  In  1846,  in  the  height  of  the  railway 
mania,  he  abandoned  the  practice  of  the  Pour  Courts,  Dublin, 
and  came  over  to  England.  Here  he  established  himself  as  a 
Parliamentary  agent ;  and  his  success  in  protecting,  through 
the  Houses  of  Commons  and  Lords,  several  important  Irish 
railway  bills,  and  in  conducting  the  opposition  to  rival 
schemes,  promised  him  a  rich  harvest  as  the  reward  of  steady 
continuance  in  this  very  lucrative  branch  of  the  profession. 

But  John  Sadleir  was  ambitious  as  well  as  clever,  and  for 
such  a  character  the  eventful  year  of  1847  was  peculiarly 
favourable,  especially  when  backed  by  the  quiet  unobtrusive 
but  never-ceasing  support  which  Eoman  Catholicism  invari- 
ably extends  to  those  of  its  proteges  whose  active  exertions  it 
requires  for  the  enhancement  and  extension  of  its  own  autho- 
rity. He  became  a  member  of  Parliament,  and,  aided  by  the 
confidential  statements  assiduously  and  systematically  put  for- 
ward of  the  great  financial  ability,  the  special  business  apti- 
tude, and  the  administrative  capacity  of  the  new  member  for 
the  borough  of  Carlow,  he  obtained  a  high  reputation  in  the 
financial  and  commercial  world  almost  before  he  took  the  oaths 
at  the  table  of  the  House  of  Commons.  Solicitations  to  extend 
the  influence  of  his  name  and  patronage  to  railway  schemes 
a;nd  joint  stock  companies  of  every  kind,  flowed  in  upon  him. 
Directorships  and  chairmanships  of  boards  were  pressed  upon 
him  on  all  sides,  and  most  gratified  were  those  whose  appli- 
cations met  with  a  favourable  reception.  The  name  of  Mr. 
John  Sadleir  at  the  head  of  the  board  v,as,  by  many  share- 
holders, considered  to  be  equivalent  to  a  rise  of  at  least  one 
per  cent,  in  the  market  value  of  their  shares  ;  no  wonder,  itheu, 
that  he  speedily  found  himself  installed  as  Chairman  of  the 
Eoyal  Swedish  Eailway  Company,  Director  of  the  East  Kent, 
and  joint  manager  of  half  a  score  of  other  enterprises.  In 
fact,  for  the  moment,  he  was  a  veritable  little  Hudson. 

But  perhaps  the  most  extraordinary  circumstance  in  his 


PACTS,  rAILTIEES,   AST)  FBAUDS.  229 

metropOiitan  career  was  his  appointment  to  the  very  respon- 
sible position  of  Chairman  of  the  London  and  County  Bank. 
That  he  had  had  some  banking  experience  was  true.  The 
Tipperary  Joint  Stock  Bank  was  a  creature  of  his  own.  His 
grandfather  had  established  a  bank  in  Tipperary,  which  had 
carried  on  for  many  years  a  very  limited  and,  as  far  as  is 
known,  a  very  safe  business.  When  John  Sadleir  first  put  up 
for  a  financier,  he  changed  the  character  of  this  little  bank,  in 
which  he  had  now  acquired  sufficient  influence  for  the  purpose, 
into  a  joint  stock  company,  placing  his  brother  James  at  its 
head  as  manager  and  sole  dii-ector.  Still  the  infatuation  which 
led  the  London  and  County  board  to  appoint  him  as  their 
chairman,  when  he  had  scarcely  been  known  in  London  a  year 
— for  he  took  his  seat  as  early  as  the  year  1848 — and  the 
shareholders  to  acquiesce  in  the  selection,  is  almost  unaccount- 
able. At  the  same  time,  it  is  due  to  this  prince  of  swind- 
lers to  admit,  that  his  connection  with  the  London  and  County 
Bank  was  untarnished  by  those  crimes  which  marked  his  pro- 
gress in  every  other  capacity  in  which  his  unquestionably  great 
talents  were  exercised ;  while  the  great  attention  and  active 
zeal  he  brought  to  bear  upon  the  duties  of  the  office,  operated 
most  beneficially  to  the  institution  in  the  extension  of  its 
business,  and  the  establishment  of  its  prosperity.  It  may  be 
that  the  constant  watchfulness  and  supervision  of  an  active 
business-like  board,  the  presence  of  responsible,  intelligent, 
and  qualified  managers,  the  regular  audit  and  examination  of 
accounts,  and  the  perfect  system  with  which  most  of  our  me- 
tropolitan joint  stock  banks  are  conducted,  afforded  him  no 
opportunity  for  making  his  position  here  subservient  to  his 
apparently  natural  dishonest  disposition ;  and  that  that  activity 
of  mind,  for  which  he  was  so  remarkably  distinguished,  being 
confined  within  proper  limits,  and  controlled  by  efiective 
checks,  was  necessarily  turned  to  the  advantage  of  the  estab- 
lishment with  which  he  was  associated. 


230  PACTS,   FAILUEES,   AXD   rUAUDS. 

But  altliougli  tlie  chairmanship  of  the  London  and  County 
offered  no  scope  for  the  exercise  of  his  peculiar  penchant  to 
the  prejudice  of  the  bank,  it  gave  him  status  as  a  financial 
authority.  The  success  of  the  institution  under  his  manage- 
ment drew  attention  to  him  in  monetary  and  political  circles, 
and  to  a  certain  extent  tended  to  confirm  the  reports  which 
had  been  so  industriously  circulated  in  his  favour.  In  Parlia- 
ment he  was  looked  forward  to  as  one  who  might  some  day  fill 
the  office  of  Chancellor  of  the  Exchequer,  and  even  minis- 
terial eyes  were  turned  towards  him.  Governmental  office, 
however,  was  out  of  the  question  while  he  continued  to  be  the 
avowed  tool  of  the  ultra-montane  party.  But  those  whose  duty 
it  is  to  watch  the  pulse  of  such  members  of  the  House  of 
Commons  as  may  be  useful  to  the  ministry  of  the  day,  saw  no 
very  great  difficulty  in  the  task  of  winning  over  the  ambitious 
member  for  Carlow ;  and  when  Lord  Aberdeen  took  office  in 
1853,  the  offer  of  a  junior  Lordship  of  the  Treasury  was  a 
temptation  sufficiently  powerful  to  dispel  scruples  of  conscience, 
and  to  transfer  his  allegiance  from  the  see  of  Borne  and  Car- 
dinal AViseman  to  the  ultra- Protestant  Premier.  He  replied 
to  the  taunts  which  were  liberally  showered  upon  him  for 
deserting  his  old  friends  of  the  brigade,  by  saying  that  his  hos- 
tility Was  only  directed  against  Lord  John  Bussell,  who,  by 
the  Ecclesiastical  Titles  Bill,  had  openly  declared  himself  the 
enemy  of  the  Eoman  Catholic  faith,  in  so  far  as  it  aspired  to 
titulary  recognition  within  these  realms ;  but  this  excuse  served 
him  not  with  those  who  remembered  that,  although  Lord  John 
was  not  at  the  head,  he  was  stUl  a  most  important  member  of 
the  new  Government,  and,  as  the  leader  of  the  House  of 
Commons,  was  the  chief  under  whom  the  new  junior  Lord 
must  serve.  Consequently,  John  Sadleir  had  to  pay  the 
penalty  of  his  desertion  from  the  standard  of  ultra-Eomanism 
in  the  loss  of  his  seat  for  Carlow.  This,  however,  by  no  means 
disconcerted  him,  and  he  resolved  to  try  his  fortunes  with  a 


TACTS,  FAILUEES,  AND  FEAUD8.  231 

constituency  in  which  the  papal  elements  did  not  so  largely 
preponderate  as  amongst  the  electors  of  Carlow.  About  this 
time  a  vacancy  occurred  in  the  representation  of  the  borough 
of  Sligo— and  he  resolved  to  oiler  himself— and  to  win.  With 
ordinary  minds  this  would  have  been  a  task  too  hazardous  to 
attempt,  for  he  was  now  in  the  position  of  a  politician  whom 
no  political  party  would  trust.  He  had  forfeited  the  confidence 
of  the  Eomanist  repealers,  and  was  viewed  with  suspicion  by 
Protestants  and  other  classes.  Besides,  there  was,  in  the 
person  of  Mr.  Patrick  Somcrs,  a  candidate  well  known  to  the 
electors  of  SHgo,  who  had  often  represented  them,  and  who, 
unless  money  influence  was  brought  to  bear  against  him,  was 
sure  to  be  returned.  These  difficulties  were  but  incentives  to 
the  genius  of  John  Sadleir.  Amongst  the  members  of  the  press 
with  whom  he  had  come  in  contact,  was  a  clever,  but  not  over- 
scrupulous, native  of  the  town  of  Sligo — a  man  of  strong  assur- 
ance, and  some  natural  eloquence — a  weU-known  harauguer  at 
judge  and  jury  societies  and  open  debating  clubs,  and  who  at 
that  moment  happened  to  be  disengaged,  and  ready  for  any 
excitement  that  would  combine  immediate  pleasure  with  pro- 
spective business.  This  person,  it  is  alleged,  was  selected  to 
go  to  Sligo  and  divide  the  interest,  so  as  to  enable  the  funds 
of  the  Lord  of  the  Treasury  to  be  effectively  employed  in 
defeating  poor  Patrick  Somera. 

Of  course  the  presence  of  this  third  candidate,  whose  posi- 
tion and  antecedents  were  well  known  to  his  former  fellow- 
townsmen,  was  looked  upon  by  the  electors  as  a  farce ;  but  it 
was  a  rtue  which  appeared  to  have  answered  the  purpose — 
the  new  aspirant  to  Parliamentary  honours  polled  some  votes, 
and  thus  the  return  of  his  presumed  opponent  was  secured  by 
the  narrowest  of  majorities,  while  he  himself  was  compelled  to 
accept  the  hospitalities  of  the  turnkey  of  Sligo  gaol,  for  non- 
compliance with  the  pecuniary  demands  of  the  returning- 
oficer  for  his  proportion  of  the  hustings'  expenses. 


232  PACTS,    FAILUEES,    AND    rEAUDS. 

The  game  John  Sadleir  now  played  was  a  high  one,  and  the 
stakes  were  heavy.  The  Secretaryship  of  the  Treasury,  with 
its  patronage  and  emoluments,  was  before  him,  and  in  such 
hands  to  what  account  might  those  emoluments  not  be  turned  ? 
And  at  the  end  of  the  vista,  now  brought,  as  it  were,  almost  with 
the  magnifying  powers  of  a  lorgnette,  within  his  grasp,  was  the 
Chancellorship  of  the  Exchequer  itself,  with  its  facilities  of  ope- 
rating indirectly  upon  the  funds,  and  realizing  a  princely  fortune 
by  the  stroke  of  a  pen,  or  effecting  some  other  deep-laid  plan 
of  financial  double-dealing.  Unfortunately  for  the  golden 
hopes  which  had  now  opened  to  his  mental  vision,  he  had 
held  the  flattering  appointment  but  a  very  short  time  when 
certain  whisperings  were  heard  at  the  Treasury  board  of  inge- 
nious monetary  arrangements  in  relation  to  certain  of  Mr. 
Sadleir's  numerous  mercantile  enterprises — some  assert  in  con- 
nection with  the  Treasury  itself — which  were  not  thought 
altogether  consistent  with  the  honour  of  a  high  government 
official,  and  an  intimation  from  the  right  honourable  gentle- 
man who  was  responsible  for  the  Treasury  business,  backed  by 
the  approval  of  the  noble  Earl  who  led  the  Cabinet,  that  her 
Majesty  would  be  graciously  pleased  to  dispense  with  his 
further  services,  resulted  in  his  resignation. 

This,  perhaps,  was  the  commencement  of  the  ebb-tide  in 
the  fortunes  of  this  extraordinary  man.  People  in  the  City 
began  to  ask  inconvenient  questions  as  to  the  cause  of  his 
sudden  retirement  from  an  office  which  promised  to  a  man  of 
his  temperament  so  many  future  advantages.  The  excuses  of 
deference  to  the  wishes  of  the  Irish  Eoman  Catholics,  the 
absorbing  nature  of  private  occupations,  and  others,  which  his 
friends :  of  the  press  were  not  slow  in  inventing  for  him,  were 
received  with  more  than  doubt.  Inquiries  were  instituted  by 
the  curious  as  to  whether,  after  all,  John  Sadleir  was  the  mil- 
lionaire which  he  had  hitherto  been  regarded,  and  the  City 
houses  with  which  the  companies  and  the  institutions  he  was  con- 


PACTS,   PAILUEES,   AND  FEAUDS.  233 

nected  with  did  business  became  somewhat  impertinently  par- 
ticular as  to  the  securities  upon  which  advances  of  cash  were 
required,  and  more  than  ordinarily  exacting  in  their  demands 
of  punctuality  in  remittances  to  meet  drafts  due.  His  retire- 
ment from  the  Government  was  shortly  after  followed  by  his 
resignation  of  the  chairmanship  of  the  London  and  County 
Bank,  and  then  ensued  the  desperate  struggle  to  ward  off  the 
terrible  explosion  which  was  inevitable  the  moment  the  frauds 
and  forgeries  through  which  he  had  existed  during  the  five 
preceding  years,  were  discovered. 

The  position  in  which  he  now  found  himself  admitted  of  no 
half  measures.     From  the  forgery  of  title-deeds,  the  wholesale 
manufacture  of  fictitious  shares,  down  to  the  circulation  of 
worthless  paper,  for  which  he  found  ready  facilities  in  the  gra- 
titude of  certain  of  his  needy  countrymen,  who  having  been 
assisted  by  him  to  appointments  in  London  and  elsewhere, 
could  scarcely  refuse  their  acceptances  for  thousands,  w^hile 
shillings  would  probably  sum  up  the  total  of  their  property — 
to  these  and  every  kind  of  shift  which  the  ingenuity  of  a  man 
with  the  felon's  gaol  and  the  convict  settlement  staring  him  in 
the  face  could  devise,  he  resorted  to.    At  this  time  he  might 
have  beeen  observed  daily  in  the  City,  endeavouring  to  raise 
money  by  every  or  any  expedient,  and  begging  the  indulgence  of 
City  Article  writers  to  withhold  or  contradict  damaging  para- 
graphs which  were  calculated  to  precipitate  the  catastrophe 
which  nothing  could  avert.     During  the  week  ending  the  16th 
of  February,  1856,  the  last  of  his  existence,  and  just  ten  years 
after  he  had  made  his  first  appearance  in  London,  his  whole  time 
was  thus  occupied.     The  drafts  of  the  Tipperary  bank  had  been 
dishonoured  at  Glyn's — the  necessary  remittances  not  having 
been  paid  in.     Of  course  this  fact  became  known,  and  his  exer- 
tions to  counteract  its  fatal  consequences  were  unremitting. 
Instead  of  resigning  himself  to  despair,  as  many  men  would 
have  done,  that  marvellous  energy  of  character  which  had 


234  FACTS,    FAILTJEES,   AKD  FEATIDS. 

marked  Ms  career  from  the  first,  seemed  to  rise  witli  tlie  occa- 
sion. But  the  bankers  refused  to  honour  a  single  draft  vmtil 
they  had  the  money  in  hand ;  public  writers  wanted  something 
more  than  his  mere  word  before  they  would  consent  to  proclaim 
to  the  world  the  solvency  of  a  man  whom,  on  more  than  suffi- 
cient grounds,  they  had  hinted  was,  if  not  utterly  bankrupt, 
at  least  in  a  state  of  the  most  extreme  pecuniary  difficulties  ; 
and,  to  crown  all,  a  proposal  made  to  Messrs.  "Wilkinson,  Grur- 
ney,  and  Stevens,  who  had  frequently  assisted  him  in  raising 
money,  was  so  unreasonable,  that  their  suspicions  were  aroused 
as  to  the  genuineness  of  certain  deeds  under  the  seal  of  the 
Irish  Encumbered  Estates  Commission,  upon  the  security  of 
which  they  had  already  made  considerable  advances.  Sadleir 
detected  the  doubt  which  he  had  imwittingly  raised,  and  he 
was  not  mistaken  in  his  expectations,  that  the  firm  would  take 
instant  steps  to  satisfy  themselves.  He  saw  at  once  that  the 
game  was  up — for  the  signatures  to  the  documents  were  forged, 
the  official  seal  of  the  Court  having  been  transferred  from  a 
genuine  deed — and  he  at  once  made  up  his  mind  to  anticipate 
the  denouement.  He  went  home  to  his  house  in  Gloucester 
Square,  Hyde  Park,  ordered  tea,  gave  directions  to  his 
servants,  wrote  three  letters,  and  having  secreted  a  large 
quantity  of  essential  oil  of  almonds,  towards  midnight  went 
out. 

On  Sunday  morning,  the  l7th  of  Eebruary,  as  a  labouring 
man  was  crossing  Hampstead  Heath,  immediately  at  the  back 
of  the  tavern  known  as  Jack  Straw's  Castle,  he  discovered  the 
body  of  a  gentleman,  cold  and  stiff".  He  had  evidently  been 
dead  some  hours,  and  was  lying  on  the  rise  of  a  small  mound, 
in  a  spot  which  seemed  to  have  been  carefully  selected.  His 
clothes  were  undisturbed ;  by  his  side  was  lying  a  bottle  la- 
belled in  several  places  "  Essential  Oil  of  Almonds,"  '•'  Poison," 
and  still  containing  a  small  portion  of  the  fatal  liquid.  At  a 
short  distance  from  him  was  a  silver  cream  ewer,  empty,  but 


PACTS,  FAILrRES,   AND   PltAXTDS.  235 

smelling  strongly  of  the  same  drug.  To  mark  his  identity  he 
Lad  written  his  name  and  address  on  a  piece  of  paper,  which 
was  found  in  his  pocket.  He  was  removed  to  Hampstead 
workhouse,  where  the  inquest  was  held.  Tliere  could  be  no 
doubt  of  the  cause  of  the  suicide  now.  The  gentleman  who  had 
been  despatched  to  Dublin,  bad  discovered  the  forgery  of  the 
deeds;  the  Tipperary  bank  had  suspended  payment,  and  the 
enormous  defalcations  of  the  Sadleirs  in  reference  to  it  were 
beginning  to  be  known ;  the  manufactured  Swedish  Eailway 
shares  were  being  detected,  and  irregularities  in  connec- 
tion with  title-deeds,  acceptances,  and  securities  of  all  kinds 
were  crowding  in  on  every  side  and  from  every  quarter.  There 
was  no  room  for  question  in  the  mind  of  the  jury  as  to  the 
motive  of  the  suicide,  and  they  returned  the  only  verdict  which 
under  the  circumstances  they  could  return,  \iz.,felo  de  se. 

Thus  died,  by  his  own  hand,  at  the  early  age  of  forty-two, 
John  Sadleir,  one  of  the  greatest,  if  not  the  greatest,  and  at 
the  same  time  the  most  successful,  swindler  that  this  or  any 
other  country  has  produced.  That  he  was  a  man  of  high 
talents,  few  who  knew  him  personally  can  doubt ;  and  had  he 
been  content  to  apply  those  talents  to  honest  courses,  the 
brilliant  opportunities  which  opened  for  their  exercise  would 
have  enabled  him  to  attain  the  highest  position  in  the  State, 
But  his  impetuosity  would  not  brook  the  labour,  and  the  toil, 
and  the  delay  of  gratifying  his  ambition  in  a  legitimate  manner. 
He  sought  the  short  road  to  fortune,  and,  like  all  who  have 
travelled  that  delusive  path,  miserably  failed.  The  amount  of 
misery  which  he  caused  is  almost  incalculable.  In  the  Tipp^ 
rary  bank,  numbers  of  his  poorer  fellow-countrymen  had  been 
induced,  by  specious  representations  of  prosperity  and  false 
accounts,  to  embark  their  all.  Not  three  weeks  before  his 
death,  he  had,  in  conjunction  with  his  brother  James,  issued  a 
report  and  balance-sheet,  representing  the  bank  to  be  in  the 
most  floui'ishing  condition,  and  declaring  a  dividend  of  six  per 


236  FACTS,   FArLTTEES,  AKTJ  FBArDS. 

cent.,  with  an  additional  bonus  of  three  per  cent.  Upon  the 
faith  of  these  periodical  statements,  numbers  of  farmers, 
tradesmen,  half-pay  officers,  and  others  in  a  similar  condition, 
became  shareholders,  and  were  in  consequence  utterly  ruined. 
Prom  this  establishment  alone  John  Sadleir  had,  with  the  con- 
nivance of  his  brother,  contrived  to  abstract  £200,000 ;  and 
the  total  defalcations  of  the  bank,  when  it  suspended  payment, 
amounted  to  £400,000,  As  chairman  of  the  Eoyal  Swedish 
Eailway  Company,  he  issued  false  shares  to  the  nominal 
extent  of  £150,000,  the  whole  proceeds  of  which  he  appro- 
priated. What  he  obtained  from  other  sources  will  probably 
never  be  accurately  ascertained,  but  the  aggregate  must  be 
something  enormous. 

And  what  is  by  no  means  the  least  singular  part  of 
the  affair  is,  that  nobody  has  ever  been  able  to  form  a  con- 
jecture of  the  manner  in  which  the  money  thus  fraudulently 
obtained  was  dissipated.  There  was  nothing  ostentatious  in 
John  Sadleir's  habits,  nor  was  he  in  any  way  extravagant  in 
his  mode  of  living.  He  kept  hunters  but  not  a  regular  stud, 
and  scarcely  ever  participated  in  the  pleasiu-es  of  the  table. 
His  whole  time  was  occupied  in  his  numerous  business  occu- 
pations ;  he  appeared  to  be  always  making  money,  and  never 
spending  it ;  and  even  a  day  before  his  deabh  he  is  known  to 
have  received  a  considerable  sum,  the  disposal  of  which 
has  never  been  thoroughly  ascertained.  The  mystery  which 
hangs  over  the  disappearance  of  the  amounts  his  frauds 
must  have  realized,  has,  no  doubt,  led  to  the  numerous  stories 
that  have  been  promulgated  both  in  Ireland  and  America,  that 
the  suicide  was  a  sham,  and  that  the  body  found  on  Hamp- 
stead  Heath  was  not  Sadleir's,  but  one  procured  to  personate 
him,  while  he,  during  the  excitement  of  the  supposed  self- 
murder,  effected  his  escape.  Unless  the  witnesses  on  the 
coroner's  inquest  were  perjured,  and  the  coroner  himself  was 
in  the  conspiracy,  this  hypothesis  is  altogether  impossible. 


FACTS,   TAILTJEES,   AXD   FBAUDS.  237 

The  identity  was  sworn  to  by  his  servant,  tlio  medical  atten- 
dant ;  and  the  coroner,  Mr.  Wakley,  who  knew  him  well,  and 
had  sat  in  the  House  of  Commons  with  him,  both  being 
members  at  the  same  time,  subsequently  bore  public  testi- 
mony that  the  body  upon  which  he  held  the  inquest  was 
indeed  that  of  John  Sadleir.  And  if  necessary  the  evidence 
of  one  or  two  of  his  most  bitter  opponents,  who  examined  the 
corpse,  could  be  produced,  who  concur  in  averring  that  there 
could  not  be  the  least  doubt  in  the  matter.  Up  to  the  Satur- 
day it  is  supposed  John  Sadleir  had  reason  to  believe  that  he 
would,  some  way  or  other,  be  enabled  to  stave  off  the  evil 
hour ;  for,  although  the  drafts  of  the  Tipperary  Bank  had  on 
Thursday  or  Friday  been  returned  by  the  London  agents, 
he  had  endeavoured  to  counteract  the  prejudice  of  the  event 
by  obtaining  insertion  in  the  daily  papers  of  an  explanation, 
stating  that  the  irregularity  arose  from  an  error,  and  that 
the  payments  in  future  would  resume  their  regular  course.* 

*  To  illustrate  the  cool  assurance  of  John  Sadleir  under  the  circum- 
stances, it  may  be  as  well  to  give  the  actual  conversation  that  passed  in  the 
o£5ce  of  one  of  the  writers  of  a  City  article  on  the  occasion.  Even  steeped 
as  he  waa  to  his  eyes  in  crime,  he  preserved  admirable  calmness,  and 
betrayed  not  the  least  apprehension. 

Scene — Lombard  Street,  hour  about  one,  p.m. 

John  Sadleir  (pale,  cadaverous,  but  gentlemanly),  introduced  by  a 
friend  and  brother  director  of  a  Bank. — Oh,  there  has  been  some  slight 
mistake  respecting  the  announcement  of  the  drafts  of  the  Tipperary  Bank 
having  been  refused  over  the  way  ;  it  is  all  set  straight;  the .  remittances 
have  been  delayed  passing  through  Hull,  when'  they  should  have  coitie 
direct  to  London.    Just  please  mention  it,  so  that  the  fact  may  be  kno^fn." 

Party  addressed. — You  are  sure  it  is 'all  right;  because  it  will  bo 
awkward  if  there  is  any  further  diiQculty. 

Sadleir  and  hit  friend. — It  is  all  made  straight;  you  can  ask  over 
the  way. 

Tarty  addressed. — You  are  sure  there  will  be  no  fresh  hitch. 

Sadleir  (placidly,  but  with  great  emphasis). — I  am  sure  there  will  bo 
no  further  hitch. 

The  inquiry  was  made  "  over  the  way  ;"  it  was  stated  that  the  drafts 
had  been  provided  for,  and  the  explanation  as  requested  was  ailorded.    But 


238  TACTS,   TAILUEES,   A>'D    FRAUDS, 

The  subsequent  difficulties  whicli  pressed  upon  liim;  tlie 
refusal  of  those  with  -whom  he  had  had  extensive  pecuniary 
engagements  to  afford  additional  assistance,  and  the  know- 
ledge that  his  frauds  could  no  longer  be  concealed,  were  suffi- 
cient causes  to  oppress  his  mind,  and  tempt  him  to  commit  the 
fatal  act.  At  the  last  moment,  therefore,  when  the  dread 
alternative  opened  fully  upon  him,  he  awoke  to  the  enormity  of 
the  crimes  he  had  committed,  and  was  visited  with  something 
like  compunction  of  conscience  for  the  misery  he  had  caused. 
The  letters  he  wrote  to  his  parliamentary  friends  and  his  imme- 
diate relatives,  especially  the  one  addressed  to  his  brother's 
wife,  after  he  had  returned  home  on  the  Saturday  night,  when 
he  resolved  upon  the  suicide,  lead  to  this  opinion,  and  show 
that,  although  his  intellect  had  not  become  disturbed,  he  felt 
poignantly  the  position  in  which  he  had,  through  his  nefarious 
and  speculative  career,  placed  himself.  It  is  fully  believed  that 
the  aggregate  amount  of  his  defalcations  and  frauds  will  never 
transpire.  Several  persons  are  believed  to  have  suffered  to  a 
severe  extent,  through  the  positive  abstraction  and  exchange  of 
deeds,  but  as  they  are  known  to  be  in  a  condition  to  bear  the 
loss,  they  hesitate  to  admit  the  fact.  Sadleir's  own  repre- 
sentations were  that  he  was  worth  at  least  £6,000  per  annum ; 
and  it  is  estimated  that  an  actual  sum  of  between  £250,000 
and  £300,000  must  have  passed  through  his  hands  while  he 
was  connected  with  the  London  and  County  Bank,  the  Eoyal 
Swedish  Eailway,  the  Carson's  Creek  Gold  Mining  Company, 
and  the  other  class  enterprises  with  which  he  was  associated. 
Ko  satisfactory  trace  of  its  absorption,  as  has  before  been 
stated,  can  be  found,  and  only  one  surmise  remains,  viz.,  that 

the  party  entertained  his  suspicions,  and  meeting  the  friend  of  Sadleir  late 
in  the  day,  he  asked  him  if  there  was  not  something  "  doubtful"  in  the 
business.  The  reply  was,  "  No,  there  cannot  be ;  the  Bank  has  just 
declared  a  dividend  and  bonus,  and  the  report  is  most  favourable."  Two 
or  three  days  afterwards  the  explosion  occurred,  and  then  Sadleii'  and 
his  transactions  appeared  in  their  proper  L'ght. 


TACTS,  TAILURES,   AJTD   FBAUDS.  239 

the  greater  proportion  was  sunk  at  the  Stock  Exchange  in 
speculations  disastrous  to  himself  and  those  who  were  engaged 
with  him.  Dark  hints  have  been  dropped,  and  curious  sug- 
gestions made,  which  would  point  to  quarters  not  generally 
suspected,  although  it  is  not  improbable  that  satisfactory  reve- 
lations on  this  all-important  point  may  yet  take  place.  As 
showing  that  he  followed  his  designs  out  in  a  most  practical 
and  business-like  way,  the  discovery  was  made  after  his  death 
of  a  number  of  real  seals  of  the  Encumbered  Estates  Court, 
which,  of  coiu'se,  would  have  been  employed  to  assist  in  the 
fabrication  of  deeds  to  meet  his  necessities  for  advances  as 
they  arose,  had  it  not  been  for  the  measures  adopted  by  Messrs. 
"Wilkinson,  Stevens,  and  Co.,  and  the  precipitate  collapse  of 
the  Tipperary  Bank.  It  is  evident,  before  Sadleir  determined 
with  strong  nerve  and  studied  preparation  to  ease  himself  from 
his  embarrassments,  he  had  left  no  resource  untried  to  secure 
means  by  which  to  reduce  his  liabilities.  He  quitted  the  world 
a  bachelor,  but  that,  if  report  speaks  truly,  was  not  his  own 
fault,  for  he  had  endeavoured  to  obtain  the  hand  and  fortune 
of  more  than  one  wealthy  Eoman  Catholic  heiress,  through 
whose  money  he  naturally  hoped  to  retrieve  his  position,  and 
by  diminishing  the  amount  of  his  general  indebtedness,  to 
obhterate  the  transactions  which  presented  the  most  fearful 
testimony  of  his  guilt.*  But  fortunately  he  did  not  succeed 
in  drawing  within  his  toils  either  of  the  ladies  to  whom  he 
paid  his  court,  and  that  fascination  and  punctilious  business 
demeanour  which  had  so  greatly  ensured  his  admission  to  the 
confidence  of  capitalists  and  others,  failed  to  serve  him,  and 
gain  him  attention,  when  he  approached  the  gentler  sex. 

•  Tlie  late  revelations  in  the  trial  of  f  ho  Tipperary  Bank  versus  the 
London  and  County  Bank  show  the  estimate  his  brother  held  of  his 
veracity. 


240  TACTS,    PAILTJKES,   A^B   PEArDS, 

THE  SUICIDE  OF  ME.  JOHN  SADLEIE,  M.P. 

{The  Times,  Monday,  Feb.  18,  1856.) 

The  body  of  Mr.  J.  Sadleir,  M.P.,  was  found  on  Sunday  morning, 
February  17,  1856,  on  Hampstead  Heath,  at  a  considerable  distance  from 
the  public  road.  A  large  bottle,  labelled  "  Essential  oil  of  bitter  almonds,'' 
and  a  silver  cream-jug,  both  of  which  contained  a  small  quantity  of  the 
poison,  lay  by  his  side.  The  body  was  at  once  removed  to  the  workhouse, 
where  it  was  seen  by  Dr.  Nichol  a  few  minutes  afterwards.  A  powerful 
odour  of  bitter  almonds  was  perceptible  at  the  mouth.  He  had,  probably, 
lain  on  the  spot  where  he  was  found  during  the  greater  part  of  the  night, 
as  the  body  was  quite  cold,  and  the  rigor  mortis  completely  established. 
It  appears  that  Mr.  Sadleir  left  his  house  (11,  Gloucester  Square,  Hyde 
Park)  about  half  past  eleven  o'clock  on  Saturday  night,  and  as  yet  nothing 
further  has  been  ascertained  respecting  his  movements.  The  body  has 
been  recognized  by  several  friends  of  the  deceased.  Mr.  Sadleir  formerly 
practised  as  a  solicitor  in  Dublin  with  great  success,  and  enjoyed  a  high 
professional  reputation.  In  1847  he  entered  Parliament  as  member  for 
Carlow,  and  sat  for  that  borough  until  the  dissolution  in  1855.  Upon  the 
accession  of  Lord  Aberdeen  to  the  Premiership,  Mr.  Sadleir  was  offered, 
and  accepted,  office  as  a  Junior  Lord  of  the  Treasury,  and  he  continued  a 
member  of  the  administration  for  some  months.  In  1848,  he  became 
chairman  of  the  London  and  County  Joint-Stock  Banking  Company,  and 
for  several  years  presided  over  the  affairs  of  that  body  with  great  ability. 
Subsequently  he  vacated  the  chair,  and,  though  his  connection  with  the 
company  continued,  he  took  no  active  part  in  its  business.  His  occupa- 
tion of  the  chair  at  the  last  general  meeting,  was  simply  an  act  of  courtesy 
towards  his  late  colleagues  in  the  dii-ection.  We  have  been  informed  that 
he  was  a  purchaser  to  a  large  amount  of  lands  sold  in  the  Encumbered 
Estates  Court  in  Ireland,  and  that  he  was  extensively  connected  with 
various  commercial  undertakings  of  magnitude,  but  that  he  was  under  no 
heavy  liabilities  to  the  banking  company  to  which  we  have  alluded ;  and 
that  for  the  comparatively  small  account  that  remained  open  against  him 
at  the  time  of  his  decease,  the  company  was  guaranteed  by  ample  securities. 


THE  I^"Q^E3T  ox   THE  BODY. 

On  Tuesday,  the  19th  of  February,  Mr.  Wakley,  the  coroner  for  Mid- 
dlesex, and  a  respectable  jury,  inhabitants  of  Hampstead,  opened  an  in- 
quest on  the  body  of  Mr.  John  Sadleir,  M.P. 

Mr.  "WilUam  T.  Manning,  coroner  of  the  Queen's  Household  and  the 
Verge,  appeared  on  behalf  of  the  relatives  of  the  deceased,  two  of  whom 
were  present — namely,  Mr,  William  Sadleir,  his  eldest  brother,  and  Mr. 


FACTS,   TArLTTBES,  A^D   FRAITDS.  241 

Clement  Sadlcir,  a  jounger  brother.  Several  of  the  personal  friends  and 
acquaintances  of  the  deceased  were  also  in  attendance,  including,  among 
others,  Mr.  Francis  Scully,  M.P.,  Mr.  Vincent  Scully,  M.P.,  Mr.  Leonard 
Morrough,  of  Dublin,  Mr.  J,  H.  Doyle,  and  Mr.  Norris. 

The  deceased  gentleman  was  known  in  public  life  as  the  representative 
in  Parliament,  first  of  the  borough  of  Carlow,  and  lately  of  Sligo,  as  a 
Lord  of  the  Treasury  in  the  Government  of  Lord  Aberdeen,  and  as  the 
Chairman  of  the  London  and  County  Bank.  He  was  in  the  forty-second 
year  of  his  age,  unmarried,  and  had  in  early  life  practised  as  a  solicitor 
in  Dublin. 

The  jury  proceeded  to  view  the  body,  which  lay  in  a  shell  in  the  dead- 
house,  and  on  their  return 

Joseph  Elwin  was  called,  and  deposed  that  ho  was  the  butler  of  the 
deceased,  and  resided  iu  his  master's  house,  11,  Gloucester  Square,  Hyde 
Park  .Gardens.  lie  had  seen  the  body,  and  identified  it  as  that  of  Mr 
Sadleir.  He  saw  him  last  alive,  about  half-past  eleven  o'clock  on  Saturday 
evening  last,  in  the  dining-room  of  his  own  house.  He  did  not  know  what 
time  the  deceased  left  the  house,  but  it  must  have  been  between  half-past 
eleven  and  a  quarter  to  one  o'clock.  IIo  had  previously  to  half-past  eleven 
gone  twice  into  the  dining-room  to  take  away  the  tea-things,  but  his  master 
would  not  allow  him  to  do  so.  At  a  quarter  to  one  o'clock  that  night  he 
went  to  fasten  the  front  door,  but  he  did  not  do  so,  finding  that  his  master 
had  gone  out.  On  going  into  the  dining-room,  where  his  master  had  been 
during  the  evening,  he  found  that  one  of  the  candles  had  been  put  out ; 
and  on  returning  into  the  hall,  he  noticed  the  other  extinguished,  and 
standing  on  the  slab  there.  He  also  knew  Mr.  Sadleir  had  gone  out,  from 
his  hat  and  a  thick  heavy  greatcoat,  the  latter  of  which  he  seldom  wore, 
having  been  taken  away  from  the  hall.  The  front  door  was  shut,  but  he 
did  not  interfere  with  it,  as  he  knew  his  master  was  out,  and  could  let 
himself  in  with  his  latch-key. 

Joseph  Bates,  a  labouring  man,  living  at  7,  Branston^s  Court,  Hamp- 
stead,  deposed  to  finding  the  body  of  the  deceased,  about  twenty  minutes 
before  nine  o'clock  on  Sunday  morning  last,  at  the  back  of  the  Jack  Straw's 
Castle  Tavern,  beside  a  bog,  about  two  hundred  yards  from  the  high  road. 
He  was  lying  on  his  back,  with  his  head  bent  backwards  against  a  furzo 
bush,  and  his  feet  towards  the  edge  of  the  bog.  All  his  clothes  were  on 
except  his  hat,  which  lay  near  to  the  body.  Ho  did  not  go  nearer  to  tho 
body  at  first  than  about  twenty  yards,  until  a  policeman  came,  whom  ho 
had  directed  a  man  named  Kudge,  who  was  passing,  to  go  for.  On  ap- 
proaching the  deceased  with  the  polioe-constablo  and  Budge,  they  found 
near  him  a  silver  cream-jug  (produced)  and  a  bottle  marked  "  poison." 
[The  bottle  was  here  produced  and  identified.  It  had  a  glass  stopper 
covered  with  leather,  across  which  the  word  "poison"  was  written  in  largo 

U 


242  TACTS,   TAILrCES,    A^'D   FDArDS. 

letters  three  times.  The  bottle  itself,  which  -was  so  large  as  to  hold  nearly 
half  a  pint,  was  also  labelled  with  the  same  word  in  different  places,  and 
was  inscribed,  "  Essential  oil  of  bitter  almonds,"  and  with  the  name  of  the 
chemist  who  supplied  the  poison,  "  John  Maitland,  10,  Chester  Place,  Hyde 
Park  Square."]  He  did  not  feel  the  skin  of  the  body  at  all,  to  know 
whether  or  not  it  was  cold.  He  saw  the  pockets  searched  by  the  police- 
constable.  [The  constable,  as  will  be  seen,  afterwards  described  their 
contents.]  The  body  was  put  on  a  stretcher,  and  taken  to  the  workhouse. 
Ifo  medical  gentleman  was  sent  for  when  the  body  was  first  found.  He 
saw  no  signs  of  Tiolenoc  or  struggling  about  the  spot,  nor  were  the 
deceased's  clothes  at  all  torn  or  disturbed. 

Police-constable  Hewson,  323  S,  deposed  to  accompanying  the  previous 
witness  to  see  and  remove  the  body  about  a  quarter  before  nine  on  Sunday 
morning.  He  saw  nothing  about  the  spot  to  indicate  a  struggle,  except  a 
mark  or  two  which  the  deceased  appeared  to  have  made  with  his  heels. 
The  body  was  quite  cold.  They  found  on  the  person  of  the  deceased  six 
sovereigns,  two  half-sovereigns,  a  £5  note,  12s.  Gd.  in  silver,  some  copper, 
a  white  cambric  pocket-handkercliief,  a  small  pocket  paper-knife,  a  latch- 
key, a  pair  of  gloves,  a  case  containing  two  razors,  a  piece  of  paper,  on 
which  was  written  "  John  Sadleir,  11,  Gloucester  Square,  Hyde  Park." 
[The  butler  identified  the  writing  on  the  paper  as  that  of  his  master,  and 
also  the  rest  of  the  articles  as  having  belonged  to  him.]  The  cream-jug, 
■which  had  a  few  drops  of  the  poison  stiU  in  it,  was  lying  near  him,  as  if  it 
had  dropped  from  his  right  hand.  The  bottle  lay  on  his  left  side,  with  the 
stopper  out,  and  about  a  foot  distant  from  it.  The  razors  were  also  lying 
in  the  case  on  his  right  side,  and  the  piece  of  leather  with  which  the 
stopper  of  the  bottle  had  been  tied  down  was  in  his  waistcoat  pocket.  Ko 
medical  man  saw  the  deceased  before  he  was  taken  to  the  workhouse ;  but 
Mr.  Nichol,  surgeon,  saw  it  there.  He  (witness)  found  no  letter  or  docu- 
ment on  the  deceased,  but  the  piece  of  paper  bearing  his  name  and  address. 
A  few  lumps  of  sugar  were  found  loose  in  his  coat  pocket. 

Mr.  E.  Kichol,  surgeon,  practising  at  Hampstead,  said  he  saw  the 
body  of  the  deceased  at  twenty  minutes  to  ten  o'clock,  on  Sunday  morning 
last,  in  the  deadhouse  of  the  workhouse.  It  was  then  quite  cold,  and  the 
limbs  were  rigid.  There  was  a  most  powerful  odour  of  the  essential  oil  of 
bitter  almonds  perceptible  at  the  moutli.  The  eyes  were  glistening,  and 
qijjte  life-like  in  expression.  There  was  no  froth  at  the  mouth.  But  for 
the  smell  of  the  oil  of  almonds,  tliere  was  nothing  to  show  that  the  unfor- 
tunate gentleman  had  died  of  poison.  The  eyes  retained  their  life-like 
expression  for  several  hours.  He  made  the  2}ost  mortem  examination  of 
the  body  on  Monday  evening,  when  it  had  undergone  httle  or  no  change. 
It  bore  no  mark  of  external  violence  anywhere.  There  was  some  post 
«»orf«re  congestion  of  the  lungs,  po  teriorly,  and  of  the  bronchial  tubes, 


TACTS,   rAILIXEES,  JLSTD  FHATIDS.  243 

There  was  no  valvular  diseoso  of  the  heart,  but  a  thickening  was  perceptible 
in  the  left  ventricle.  The  right  auricle  of  the  heart  was  distended  with 
blood,  and  the  left  ventricle  was  empty.  The  only  cavity  that  contained 
blood  was  the  right  auricle.  There  was  an  odour  of  the  essential  oil  of 
almonds  all  over  the  body.  The  stomach  contained  about  ten  ounces  of 
matter,  consisting  mostly  of  undigested  food.  From  six  ounces  of  that 
matter  he  took  an  ounce  and  a  half  of  essential  oil  of  bitter  almonds  by 
distillation,  and  half  an  ounce  simply  by  filtration.  Embedded  iu  the 
coats  of  the  stomach,  and  lying  on  it,  were  numerous  black  particles,  per- 
ceptible to  the  naked  eye.  On  examining  these  with  the  microscope,  he 
believed  them  to  be  powdered  opium.  Those  particles  were  stuck  all  over 
the  mucous  membrane,  chiefly  on  the  upper  curvature,  and  were  so  nume- 
rous as  not  to  bo  counted.  The  mucous  membrane  of  the  duodenum  was 
friable  like  that  of  the  stomach,  though  not  so  much  so,  and  its  contents 
showed  the  oil  very  evidently.  The  liver  was  healthy,  but  had  a  patch  of 
discolouration  on  it.  The  gall  bladder  was  empty,  and  there  was  slight 
congestion  here  and  there  throughout  the  smaller  intestines.  The  kidneys 
were  congested,  but  otherwise  healthy.  The  pupils  of  the  eyes  were 
dilated.  The  brain  and  membranes  were  congested,  but  were  otherwise 
healthy,  and  exhibited  no  signs  of  inflammation  whatever.  There  was  an 
efl'usion  of  serum  at  the  base,  slightly  tinged  with  blood,  to  the  extent  of 
from  four  to  six  drachms — a  large  quantity  certainly — which  might  have 
been  thrown  out  in  the  act  of  death.  There  could  be  no  doubt  that  the 
eflect  of  the  essential  oil  of  almonds  was  the  cause  of  death. 

Elwin,  the  butler,  was  recalled,  and  identified  the  cream-jug  as  that 
which  his  master  used  at  tea  on  Saturday  evening.  lie  added,  in  reply  to 
the  Coroner,  that  Mr.  Sadleir  was  quite  alone  when  he  left  him  at  tea.  Ho 
had  not  seen  the  bottle  before  which  had  been  produced  to-day.  He  took 
a  bottle  from  the  maidservant  between  nine  and  ten  o'clock  on  Saturday 
evening,  which  was  wrapped  up  in  paper.  About  five  minutes  before  seven 
o'clock  on  Saturday  evening,  when  ho  was  laying  the  cloth  for  dinner,  his 
master  gave  him  a  piece  of  paper,  in  his  own  handwriting,  to  take  to  Mr. 
]^Iaitland,  the  chemist.  [This  paper,  which  was  produced,  was  written  in 
a  bold  flowing  hand,  and  was  exactly  as  follows : — "  Get  firom  Maitland's  a 
bottle  of  the  essential  oil  of  bitter  almonds ;  I  don't  know  the  quantity 
wanted,  but — but  Kenyon  writes  to  me  to  bring  £1  worth.  Pay  my  bill 
at  Maitland's."]  [Kenyon  was  stated,  by  a  gentleman  present,  to  bo 
the  deceased's  groom,  and  to  have  care  of  his  stud  of  hunting  horses  at 
Leighton  Buzzard.]  He  went  to  Dilaitland's,  but  the  assistant  could  not 
give  it  him  at  that  time.  He  asked  the  assistant  wliat  quantity  of  the 
article  a  sovereign  would  purchase,  and  he  replied  about  half  a  pint.  Mr. 
Sadleir  had  previously  thut  evening  asked  him  to  clean  two  bottles,  and 
place  tbcm  on  the  sideboard,  which  he  did.    He  (witness)  did  not  know  it 


214  TACTS,   TATLrHES,   A^'D   TRArDS. 

was  poison  tliat  lie  had  to  get  at  Mr.  Maitland's.  He  thought  it  vras  some 
ingredient  in  a  hair-wash  which  his  master  was  going  to  mis  in  the  two 
bottles  which  had  been  placed  on  the  sideboard.  After  nine  o'clock  Mr. 
Sadleir  rang  the  bell,  and  asked  him  if  anything  had  come  from  Mr.  Mait- 
land's. Witness  said  there  had  not.  Mr.  Sadleir  said  he  supposed  Mr. 
Maitland  had  not  the  article  by  him,  and  had  to  send  out  for  it.  Witness 
said  he  had,  for  it  had  been  sent  for  at  seven  o'clock.  Mr.  Sadleir  wished 
him  to  go  for  it,  but  witness  got  the  kitchenmaid  to  go,  as  he  had  to  attend 
to  the  tea,  asking  her  at  the  same  to  post  a  letter  which  Mr.  Sadleir  had 
written  to  Mrs.  Sadleir,  in  Ireland,  his  sister-in-law.  She  returned  from 
Mr.  Maitland's  in  about  half  an  hour  with  a  bottle  wrapped  up  in  paper, 
accompanied  by  a  note,  both  which  he  took  upstairs  and  laid  by  Mr.  Sad- 
leir's  side  on  the  table.  Mr.  Sadleir  was  then  sitting  with  his  back  to 
him  and  apparently  reading,  and  did  not  speak  to  witness.  He  had  liyed 
with  the  deceased  upwards  of  eighteen  months.  The  deceased  was  a  tem- 
perate and  sober  man.  He  only  drank  a  glass  or  two  of  sherry  with  his 
dinner.  He  had  not  of  late  noticed  any  change  in  the  deceased's  manner. 
The  deceased  was  much  occupied  in  business.  He  had  not  complained  of 
Ms  head  at  all,  or  of  not  being  able  to  sleep,  nor  was  he  under  medical 
treatment.  He  came  home  unexpectedly  to  dinner  on  Saturday  erening. 
He  seldom  dined  at  home,  but  usually  at  his  club.  He  left  home  in  a  cab 
on  Saturday  morning,  with  a  quantity  of  papers  with  him,  as  he  was  accus- 
tomed to  do.  Before  getting  into  the  cab  he  returned  to  his  room  up- 
stairs, as  if  he  had  forgotten  something.  Again,  before  he  had  left  in  the 
cab  many  minutes,  he  returned,  and  went  upstairs  for  a  few  moments.  He 
left  in  the  cab  again,  and  did  not  return  until  the  evening.  He  had  never 
before  made  any  attempt  on  his  life  to  witness's  knowledge.  He  always 
spoke  civilly  to  witness,  especially  of  late,  when  witness  had  got  used  to 
his  ways. 

Hannah  Bishop,  a  woman  of  middle  age,  said — I  acted  as  kitchenmaid 
to  the  deceased.  I  went  to  the  shop  of  Mr.  Maitland,  the  chemist,  at  the 
request  of  the  preceding  witness,  for  a  parcel  on  Saturday  night  last,  be- 
tween nine  and  ten  o'clock.  I  saw  Mr.  Maitland's  assistant,  who  asked  me 
if  I  was  going  to  give  it  to  Mr.  Sadleir  himself  ?  I  said  I  should  give  it  to 
the  butler.  He  asked  me  again  whether  I  was  going  to  give  it  to  Mr, 
Sadleir.  I  said  I  never  saw  the  gentleman  (meaning  Mr.  Sadleir) ,  but  I 
would  give  it  to  the  butler.  The  assistant  cautioned  me  particularly  about 
its  being  poison,  and  asked  me  not  to  let  it  he  about  at  all  on  any  account, 
but  to  take  it  up  to  Mr.  Sadleir  immediately.  I  gave  it  to  the  butler,  and 
did  not  hear  anything  more  about  it.  When  I  went  to  Mr.  Maitland's,  I 
took  a  letter  to  the  post,  which  was  given  me  by  the  butler.  It  was  ad- 
dressed "  Mrs.  Sadleir,  Clonocody,  Clonmel."  I  believe  she  was  the  de- 
ceased's sister-in-law.     I  have  lived  three  years  in  his  service,  but  I  very 


PACTS,   FAILURES,   AND   FRAUDS,  215 

eoldom  saw  him.  I  had  sometimes  fetched  pills  from  Mr.  Maitlanu's  for 
Mr.  Sadleir,  but  not  laudanum  or  opium. 

A  gentleman  present  said,  the  letter  to  Mrs.  Sadleir,  being  posted  after 
post  hour  on  Saturday  night,  would  not  reach  its  destination  until  th's 
(Tuesday)  morning. 

The  Coroner  then  asked  Mr.  Manning  if  he  had  any  evidence  to  oflor  ? 

Mr.  Manning  said  he  had  not,  nor  did  he  wish  to  interpose  in  any  way 
as  to  the  evidence  which  tho  Coroner  might  think  necessary  to  establish  the 
cause  of  death. 

The  Coroner  said,  nothing  could  be  clearer  than  the  cause  of  death. 
Any  inquiry  after  that  was  much  to  be  regretted,  seeing  that  it  might  ex- 
tend to  matters  which  might  distress  tho  feelings  of  relatives.  He  thought 
the  law  in  that  respect  was  most  unsatisfactory.  The  letter  written  by  the 
deceased  to  his  sister-in-law  appeared  to  be  a  document  that  ought  to  be 
produced,  in  the  opinion  of  some  of  the  jury  near  him.  He  (the  coroner) 
had  no  desire  to  see  it.  It  was  perfectly  clear  to  him  that  the  unfortunate 
gentleman  had  died  by  his  own  act.  Nothing  could  by  any  possibility  be 
plainer.  It  was  much  to  be  deplored  that  facility  was  afforded  to  him  to 
obtain  the  poison  in  the  way  he  had  done  ;  but,  judging  from  his  carrying 
a  couple  of  razors  in  his  pocket,  it  was  clear  that  if  he  had  failed  in  destroy- 
ing himself  by  taking  or  procuring  the  essential  oil  of  almonds,  he  would 
have  done  it  with  a  razor.  The  only  question  for  the  consideration  of  the 
jury  was  as  to  what  was  the  state  of  his  mind  at  the  time  he  committed 
the  act. 

A  juryman  said,  it  was  with  that  view  only  that  the  jury  wished  to  see 
tho  letter  produced. 

Mr.  Manning  said,  Mr.  Xorris,  a  legal  gentleman,  was  present,  who  was 
with  Mr.  Sadleir  till  a  late  hour  on  Saturday  night,  and  probably  the  Coro- 
ner would  wish  to  have  him  called. 

The  Coroner  said,  it  was  very  desirable  that  that  gentleman  should  give 
evidence,  if  he  liad  any  to  tender. 

3Ir.  Anthony  Norris  was  tljen  called,  and,  in  reply  to  questions  put  by 
the  Coroner,  said, — I  am  a  solicitor,  practising  at  No.  2,  Bedford  Row,  and 
was  intimately  acquainted  with  the  deceased.  I  saw  him  last  alive,  shortly 
before  eleven  o'clock  on  Saturday  night  last,  at  his  house.  There  was  no 
one  else  with  us.  I  had  no  appointment  with  him,  but  I  went  up  there  to 
sec  bim,  and  was  with  him  about  half  an  hour.  I  had  known  him  since 
18i3,  and  had  frequently  transacted  business  with  him.  He  was  engaged 
in  several  public  concerns.  He  was  Chairman  of  the  London  and  County 
Bank,  and  of  the  Royal  Swedish  Railway  Company.  I  believe  he  was  aldo 
connected  with  several  other  companies,  including  an  Irish  bank,  of  which 
he  was  a  director.  He  appeared  oppressed  by  his  undertakings.  Latterly 
he  seemed  rather  haggard.    During  the  last  week  particularly  I  had  noticed 


2iQ  FACTS,   FAILUEES,   ASD   FEA.UDS, 

a  great  change  in  Lis  appearance.  He  did  not  complain  of  his  head,  but  I 
have  noticed  him  put  his  hand  to  his  head  as  if  he  was  oppressed.  He 
appeared  to  be  quite  borne  down  by  the  extent  of  his  business,  and  particu- 
larly by  some  occurrences  which  took  place  with  reference  to  his  aiFairs  last 
week.  They  were  losses  and  pecuniary  embarrassments  which  had  lately 
come  upon  him,  and  it  was  about  these  that  he  talked  to  me  during  our 
interview  on  Saturday  night.  During  the  interview  I  noticed  a  peculiarity 
in  his  manner.  His  eyes  were  bloodshot.  He  was  very  restless,  and  evi- 
dently not  in  his  usual  temperament  when  I  saw  him.  I  had  not  seen  him 
in  such  a  state  before,  at  least  not  to  anything  like  the  same  extent.  He 
■was  always  cool  and  collected  until  within  the  last  few  days.  From  Wed- 
nesday last,  inclusively,  I  had  seen  him  every  day,  and  I  think  I  saw  him 
on  Tuesday  also.  I  was  not  his  solicitor.  I  believe  he  had  various  solici- 
tors, aud  I  have  understood  that  Mr.  Gumey,  of  No.  2,  Nicholas  Lane,  was 
one  of  them.  Mr.  Gumey  and  his  partners  I  know  transacted  business 
with  him  on  Saturday.  His  life  was  insured  some  years  ago.  He  told  me 
on  Thursday  or  Friday  last  that  it  was  insured.  I  know  it  was  insured, 
for  I  once  paid  a  premium  upon  the  policy.  [Mr.  Manning. — It  was  insured 
in  one  ofBce  for  £5000.]  He  told  me  he  had  life  policies,  but  he  did  not; 
say  to  what  amount  on  the  whole.  When  I  left  Mr.  Sadleir  about  half- 
past  three  on  Saturday  afternoon  he  made  an  appointment  with  me  for  the 
next  (Sunday)  morning,  at  eleven  o'clock.  He  said  he  would  rather  I 
would  not  call  on  him  that  (Saturday)  evening,  because  he  wanted  to  col- 
lect his  papers,  and  to  be  alone.  In  consequence,  however,  of  receiving  a 
letter  from  Ireland  after  leaving  him  on  Saturday  afternoon,  which  con- 
cerned him,  I  went  and  saw  him  again  that  evening.  He  seemed  surprised 
when  I  went  in,  and  was  walking  about  the  room,  which  was  very  unusual 
■with  him.  I  thought  I  perceived  a  very  great  redness  and  peculiarity  about 
the  eyes,  as  if  he  had  been  weeping.  I  called  next  morning  to  keep  my 
appointment  ■with  him  at  eleven  o'clock,  and  then  I  learnt  for  the  first  time 
that  he  was  dead.  The  communication  I  made  to  him  on  Saturday  night 
was  not  of  a  distressing  character.  It  had  reference  to  the  events  that  had 
pressed  upon  him  during  the  week,  and  that  was  the  cause  of  my  going  to 
see  him.  I  found,  on  going  to  his  house  on  Sunday  morning,  that  he  had 
left  a  letter  for  me  in  the  hall,  which  Mr.  Nichol,  who  had  gone  there  before 
me,  had  taken  to  my  private  residence  after  I  left  home.  It  was  written 
by  Mr.  Sadleir,  and  dated  Saturday  night. 

The  Coroner — Have  you  brought  that  letter  with  you  ? 

Witness — I  have  not. 

The  Coroner — ^Why  did  you  not  bring  it  ? 

Witness — I  forgot  it. 

The  Coroner  appeared  to  think  the  omission  remarkable  under  the  cir- 


PACTS,   FAJLUBES,  AKD  FBATJDS.  247 

camstances,  and  asked  if  witness  had  really  forgotten  the  letter,  or  whether 
he  had  any  reluctance  to  produce  it  ? 

Witness  said,  ho  had  been  much  affected  ever  since  the  death  of  Mr. 
Sadleir,  and  had  really  forgotten  to  bring  the  letter.  He  did  not  know 
whether  it  was  written  after  he  left  the  deceased  on  Saturday  night.  He 
found  it  on  returning  to  bis  private  residence,  about  half-past  eleven  on 
Sunday  morning. 

By  Mr.  Manning — In  the  course  of  Saturday  afternoon  I  made  a  remark 
in  Mr.  Gumey's  office  in  reference  to  Mr.  Sadleir  s  appearance,  and  to  some 
reverses  that  had  come  suddenly  upon  him.  The  remark  was,  that  I  should 
not  be  surprised  if  Mr.  Sadleir  were  to  shoot  himself.  I  said  that  to  a  Mr. 
Stevens  about  two  o'clock  on  Saturday  afternoon.  1  was  acting  profes- 
sionally for  Mr.  Sadleir  in  one  matter  at  the  time  of  his  death.  The  reason 
I  made  that  remark  was,  that  Mr.  Sadleir  was  a  man  of  exti-aordinary  clear- 
ness and  strength  of  mind,  and  my  impression  was  that  these  reverses, 
coming  suddenly  upon  him,  as  they  did  on  Wednesday  morning  last,  his 
mind  would  break  down  at  once.  I  was  told  last  week  that  his  losses 
were  very  severe.  The  subject  was  discussed  in  my  office,  and  he  ad- 
mitted it. 

Mr.  Manning  said  he  had  to  contend  that  the  letter  written  by  the 
deceased  to  Mr.  Norris  would  bo  a  confidential  communication  between 
solicitor  and  client. 

The  Coroner  intimated  that  he  woidd  consider  the  point. 

The  butler  was  recalled,  and  stated  that  on  Sunday  morning,  when  he 
saw  his  master  had  not  come  home,  he  found  three  letters  on  the  slab  in 
the  ball,  all  addressed  to  Mr,  Eobert  Keating,  M.P.  for  Waterford,  at 
Shamrock  Lodge,  Clapham,  accompanied  by  a  paper  in  Mr.  Sadleir's  hand- 
writing, to  the  effect  that  if  he  was  not  at  home  by  nine  o'clock  on  Sunday 
morning,  he  (witness)  was  to  deliver  them.  At  nine  o'clock  on  Sunday 
morning,  his  master  not  having  come  home,  he  sent  a  messenger  with  the 
letters  to  Mr.  Keating  at  Clapham.  There  was  also  a  letter  addressed  to 
Mr.  Norris  left  on  the  slab  in  the  hall. 

Joseph  Westrup  deposed  that  he  was  an  assistant  to  Mr.  Maitland, 
chemist,  10,  Chester  Place,  Hyde  Park  Square.  He  had  heard  the  evidence 
of  the  butler  and  kitchenmaid,  which  was  in  all  respects  correct.  He 
wished  to  add  that  he  wrote  a  note  to  Mr.  Sadleir,  and  sent  it  with  the 
Icitchenmaid,  when  she  took  away  the  bottle  containing  the  oil  of  bitter 
almonds.  As  the  original  letter  did  not  appear  to  bo  forthcoming,  ho 
wished  to  read  a  copy  of  it  which  ho  bad  kept.  It  was  as  fol- 
lows:— 

"  As  the  poisonous  qualities  of  the  essential  oil  of  almonds  are  very 
great,  Mr.  Maitland  would  be  obliged  to  Mr.  Sadleir  not  to  allow  it  to  pass 


248  FACTS,   TAILUBES,   AlfD   FEAUDS. 

into  the  hands  of  inexperienced  persons,  who  may  perchance  be  unaware  of 
the  danger  in  using  it,  or  allow  it  to  lie  about  unprotected. 
"  10,  Chester  Place,  Peb.  16, 1856." 

The  Coroner  said  it  was  a  pity  that  such  articles  should  be  sold,  even 
by  medical  men. 

Mr.  Maltland  remarked  that  the  essential  oil  of  bitter  almonds  was 
sold  by  erery  confectioner  in  the  kingdom. 

The  Coroner- — A  pleasant  reflection  for  those  who  eat  confectionery. 
(A  laugh.)  Some  custards  that  I  have  seen  I  know  have  contained  the 
essential  oil  of  bitter  almonds  in  poisonous  quantities. 

Witness  continued  to  say  he  had  been  in  the  habit  of  supplying  llr. 
Sadleir  with  medicine  occasionally,  but  not  before  with  the  essential  oil  of 
bitter  almonds ;  and  that  he  should  not  have  furnished  it  on  Saturday 
night  last,  had  he  not  received  an  application  for  it  in  that  gentleman's 
own  handwriting. 

The  Coroner  then  ordered  the  room  to  be  cleared,  and  on  the  readmis- 
sion  of  the  public,  after  an  interval  of  a  few  minutes,  he  said  the  jury  had 
unanimously  expressed  a  wish  that  the  inquiry  should  be  adjourned,  in 
order  to  aiTord  time  for  the  production  of  the  letters  written  by  the  de- 
ceased on  the  night  preceding  his  death,  and  any  further  evidence  that 
could  be  adduced  to  show  the  state  of  his  mind  at  that  time.  They  wished 
him  to  say,  at  the  same  time,  that,  in  making  that  request,  they  had  no 
wish  to  go  unnecessarily  into  the  private  or  family  affairs  of  the  unfor- 
tunate gentleman,  or  to  cause  any  pain  to  his  surviving  relatives. 

Mr.  Manning  said  the  letters  written  to  Mr.  Keating  would  be  in  the 
nature  of  family  aflairs,  as  that  gentleman  was  a  relative  of  Mr.  Sadleir. 

The  Coroner  admitted  that  the  production  of  the  letters  might  be 
attended  with  some  difficulty ;  but  the  jury  were  only  anxious  to  have 
some  evidence  which  might  throw  light  on  the  state  of  the  deceased's 
mind  at  a  time  shortly  before  his  death,  and  when  the  letters  in  question 
were  produced  they  would  form  their  opinion  as  to  whether  it  was  de- 
sirable that  they  should  be  put  in  and  appear  on  his  notes. 

Mr.  Manning  said  he  was  quite  unaware  of  the  contents  of  the  letters 
in  question,  and  he  supposed  when  they  were  produced  the  Coroner  would 
peruse  them  in  the  first  instance,  and  then  confer  with  the  jury  as  to  the 
desirability,  or  otherwise,  of  reading  them  in  open  court. 

The  Coroner  said  that  those  letters  were  written  at  a  late  hour  on. 
Saturday  night,  and  it  was  essential  that  they  should  be  produced  to  show, 
if  possible,  the  state  of  mind  of  the  deceased  at  that  time.  At  the  same 
time,  he  thought  inquiries  into  family  and  private  affairs  in  cases  of  this 
kind  were  highly  mischievous,  and  he  trusted  the  day  was  not  far  distant 
when  the  law  would  be  altered  in  that  respect. 

At  the  request  of  Mr.  Manning,  Mr.  Wakley  gave  an  order  for  the 


TACTS,  TAILUBES,  AUD  PBAUDS.  249 

interment  of  the  body  of  the  deceased,  and  the  inquest  was  a^ourned  until 
Monday  next,  at  eleven  o'clock. 


THE   ADJOUBNED   INQUEST. 

On  Monday,  the  25th  of  February,  at  eleven  o'clock,  Mr.  Waklcy,  the 
coroner  for  Middlesex,  and  the  jury  resumed,  at  the  workhouse  iu  Hamp- 
Btead,  tlie  inquest  adjourned  from  Tuesday  last,  on  the  body  of  Mr.  John 
Sadleir,  M.P.  for  Sligo,  who  was  found  dead  on  Hampstead  Heath  on  the 
morning  of  Sunday  week,  under  circumstances  which  left  no  doubt  that 
he  had  died  by  his  own  hand.  It  will  be  recollected  that  the  inquest  was 
adjourned  at  the  request  of  the  jury,  to  allow  time  for  the  production  of 
certain  letters  written  by  the  deceased  on  the  night  preceding  his  death  to 
Mrs.  James  Sadleir,  his  sister-in-law,  in  Ireland,  Mr.  Robert  Keating,  M.P. 
for  Watcrford,  one  of  his  most  intimate  friends,  and  Mr.  Norris,  a  solicitor 
in  Bedford  Row,  who  had  also  been  on  terms  of  intimacy  with  him ;  which 
letters,  it  was  expected,  would  throw  some  light  on  the  state  of  mind  of  the 
deceased  almost  up  to  the  very  time  when  he  committed  the  act  of  self- 
destruction. 

Mr.  "William  T.  Manning,  coroner  of  the  Queen's  Household  and  the 
Verge,  was  again  in  attendance  on  the  part  of  the  relatives  of  the  deceased, 
some  of  whom  were  present,  as  were  also  several  of  his  personal  acquaint- 
ances and  others  with  whom  ho  had  been  in  the  habit  of  transacting 
business. 

Mr.  Manning,  addressing  the  coroner,  said  he  should  state  shortly  the 
coarse  which  it  was  proposed  to  pursue.  The  letters  which  the  jury  had 
expressed  a  wish  to  see  at  their  last  sitting  were  now  in  court,  in  pur- 
suance of  the  summons  of  the  coroner.  Mr.  Keating  was  in  attendance, 
and  would  produce  the  letters  written  by  the  deceased  to  him  on  the  night 
preceding  his  death,  and  also  the  letter  written  by  the  deceased  to  him  on 
that  night  to  Mrs.  James  Sadleir,  his  sister-in-law,  in  Ireland.  Mr.  Korris 
was  also  present,  and  would  produce  the  letter  written  by  the  deceased  to 
him  on  the  same  evening.  He  (Mr.  Manning)  proposed  to  hand  them  to 
the  coroner,  and  it  would  be  for  him  and  the  jury  to  deal  with  them  as 
they  thought  right.  Under  ordinary  circumstances  he  should  have  con- 
tended that  those  letters,  written  under  such  peculiar  circumstances,  ought 
to  have  been  excluded  from  the  public ;  but,  looking  to  the  serious  nature 
of  this  case,  ho  was  instructed  to  say,  on  behalf  of  the  family  of  the  de- 
ceased, that  they  had  no  wish  that  anything  calculated  to  throw  light  on 
the  inquiry  should  in  any  way  bo  concealed,  and  that  it  was  their  desire 
that  an  open  and  complete  explanation  of  all  the  circumstances  should  be 
made,  so  far  as  they  were  concerned.  As  regarded  the  letter  to  Mr.  Norris, 
he  would  state  the  course  that  gentleman  intended  to  take.  That  was  a 
letter  written  under  peculiar  circumstances — 


250  PACTS,   TAILrEES,   AND   TKAUDS. 

The  Coroner  (interrupting)  said  Mr.  Iforris  must,  of  course,  be  subject 
to  the  rule  of  court,  and  must  not  propose  to  himself  any  course  of  conduct. 
His  course  of  conduct  must  be  prescribed  for  him.  He  believed  Mr.  Norris 
had  better  be  called  first.  He  (the  Coroner)  would  look  oyer  the  letters 
before  they  were  read  in  open  court,  and  then  determine  whether  they 
should  be  openly  read  or  not.  He  was  quite  certain  that  was  the  course 
which  ought  to  be  adopted  in  a  case  of  this  kind,  and  he  must  take  upon 
himself  the  responsibihty  of  it. 

Mr.  Manning  acquiesced  in  the  suggestion  of  the  Coroner,  and 
Mr.  Anthony  Norris,  solicitor,  of  No.  2,  Bedford  Kow,  a  witness  ex- 
amined at  the  preyious  sitting  of  the  court,  was  re-called,  and,  in  reply  to 
questions  put  by  the  Coroner,  said,  I  left  Mr.  Sadleir  a  little  after  eleven 
o'clock  on  the  night  of  Saturday,  the  16th  inst.,  preceding  the  Sunday 
morning  on  which  he  was  found  dead.  I  had  been  with  him  on  that  occa- 
sion about  half  an  hour.  While  I  was  with  him  he  received  a  telegraphic 
message  fi-om  Dublin,  which  he  showed  to  me.  I  have  not  got  that  mes- 
sage with  me.  It  was  a  reply  to  a  telegraphic  message  which  he  had  sent 
from  the  Reform  Club  in  a  former  part  of  that  evening.  I  don't  think  the 
receipt  of  the  message  made  any  great  impression  on  his  mind.  He  read 
it,  and  then  threw  it  over  to  me  to  read.  The  letter,  a  copy  of  which  I  am 
about  to  produce,  is  in  the  handwriting  of  the  deceased.  The  original  letter 
refers  to  the  names  of  pai'ties  unconnected  with  this  inquiry,  and  its  pro- 
duction before  the  pubhc  might  cause  injury  to  them.  I  am  acting  under 
the  advice  of  counsel,  and  I  wish  to  hand  in  an  exact,  literal  copy  of  that 
letter,  with  the  omission  merely  of  the  names  of  those  parties. 

The  Coroner  said  he  should  require  to  see  the  original.  (It  was  handed 
to  him  by  the  witness,  and  he  read  it  privately.)  There  were  names  of 
persons,  he  continued,  addi-essing  the  jury,  in  that  letter  who  were  stated 
by  the  deceased  to  have  been  grievously  injured  by  his  acts,  and  it  would 
be  stiU  greater  injm*y  to  those  unfortimate  persons  to  have  their  names 
made  pubhc.  He  should  therefore  take  upon  himself  the  responsibility  of 
not  making  them  public,  for  nothing  coiild  be  more  undesirable.  Several 
of  them  were  said  to  have  been  ruined  by  his  villany.  The  letters  would 
therefore  be  read  by  the  witness,  omitting  merely  the  names  of  those 
persons. 

Mr.  Norris,  the  witness,  then  read  the  letter,  which  was  as  follows, 
omitting  the  names : — 

"Saturday  Night. 
•'  I  can  not  live — I  have  ruined  too  many — I  could  not  live  and  see 
their  agony — I  have  committed  diabohcal  crimes  unknown  to  any  hmnan 
being.     They  will  now  appear,  bringing  my  fanuly  and  others  to  distress — 
causing  to  all  shame  and  grief  that  they  should  have  ever  known  me. 

"  I  blame  no  one,  but  attribute  all  to  my  own  in&mous  villany.    — r-. 


FACTS,   PAILTJBES,   AND   FIIAUDS.  251 

, , , , ,  ,  and  hundreds  of  others  ruined  by  my 

villanj-.  I  could  go  through  any  torture  as  a  punishment  for  my  crimes. 
No  torture  could  be  too  much  for  such  crimes,  but  I  can  not  Uve  to  tea 
the  tortures  I  inflict  upon  others. 

"J.  Sadleib. 
"Tekgraph  to ,  and  otherwise  when  you  read  tliis." 

"Witness  added,  in  reply  to  the  Coroner,  that  the  deceased  told  him 
during  their  interview  on  the  Saturday  night  that  some  shares  had  been 
sent  up  to  his  house,  and  he  had  them  there  that  evening.  He  acted  for 
the  deceased  professionally  in  one  trust  in  which  he  was  concerned,  and 
was  not  otherwise  his  sohcitor. 

Mr.  Robert  Keating,  M.P.  for  Waterford,  was  next  called.  He  said, 
in  answer  to  the  Coroner,  I  reside  at  Claphara,  Surrey,  and  was  intimately 
acquainted  with  the  late  Mr.  Sadleir.  On  Sunday  morning,  the  17th  inst., 
I  received  two  letters  addressed  by  him  to  me.  I  saw  him  last  in  the  City 
on  the  Saturday,  about  five  o'clock,  the  evening  before  his  death.  I  saw 
him  on  business  at  No.  2,  Nicholas  Lano,  the  offices  of  Messrs.  Wilkinson, 
Gumey,  and  Stevens.  He  exhibited  considerable  excitement  in  conse- 
quence of  the  critical  position  of  the  Tipperary  Joint-Stock  Bank.  I  was 
with  him  about  half  an  hoiu*.  I  did  not  hear  that  he  had  been  made  aware 
then  of  any  gentleman  going  to  Dubhn.  I  heard  in  the  morning  that  ono 
of  the  firm  of  Wilkinson,  Gumey,  and  Stevens  was  going  over  to  DubUn, 
but  I  don't  recollect  that  Mr.  Sadleir's  name  was  mentioned  in  connection 
with  that  visit.  I  have  the  letters  by  mo  which  Mr.  Sadleir  wrote  to  m© 
on  the  Saturday  night.  In  justice  to  myself  I  would  say  it  is  painful  to 
me  to  produce  them,  inasmuch  as  I  consider  them  private  and  confidentiaL 

The  Coroner  said  he  regretted  as  much  as  any  one  the  necessity  for 
their  production ;  but  in  all  probabihty  they  were  written  after  eleven 
o'clock  on  the  night  preceding  his  death,  and  were  probably  his  last  acts 
before  that  of  self-destruction.  It  was  therefore  highly  desirable  that  they 
should  bo  produced,  seeing  that  they  might  throw  some  light  on  the  state 
of  mind  of  the  deceased  at  that  time. 

Mr.  Keating  said  he  should  hand  them  in  to  the  Coroner,  and  he  would 
make  what  use  of  them  ho  thought  right. 

The  letters  were  then  given  to  the  Coroner,  and,  having  been  read  by 
him  in  private,  he  asked  if  the  Tipperary  Bank  had  stopped  payment,  to 
which  Mr.  Keating  rephed  in  the  affirmative. 

Tlie  Coroner  said  if  the  Tipperary  Bank  had  not  fJEiiled,  he  should 
certainly  not  have  allowed  the  letters,  some  of  which  contained  references 
to  that  bank,  which  would  otherwise  have  been  injurious  to  it,  to  be  read. 

Mr.  Keating  then  read  the  letters  written  to  him  by  the  deceased  as 
follows,  the  punctuation  and  the  words  iu  itaUcs  being  the  deceased's 
ownt— 


252  FACTS,  FATLTTEE3,   AlSJi   FEArDS. 

"  Dear  Robert, — James  sent  me  over  liis  title  deeds  of  Coohammick  aud 
Kilconnell — I  have  not  used  these  deeds  in  any  way.  I  gave  J.  Gumey  a 
letter  from  James,  intrusted  to  me  by  bim — vrhieb  J.  Gumey  had  sent  to 
him — This  letter  can  not  be  acted  on  by  J.  Gumey  without  my  brother's 
express  authority.  "  John  Sadleib. 

"  16  Feby  56. 

"  R.  Keating,  Esq.,  M.P. 

"  T.  Tlzielli  has  a  bank  bill,  £2000,  on  which  nothinj  is  due.  It  should 
be  at  once  cancelled — If  on  Monday  the  bank  is  to  be  saved,  £8200  must 
be  paid  to  East  Kent  Railway  for  2  Orders  £6200  and  £2000— £2500 
must  be  paid  in  to  Glyn's  to  meet  order  at  sight  issued  to-day  at  Carrick. 
G-umey  knows  the  orders  falling  due  on  Tuesday.  All  are  advised  save  the 
one  for  £6200  my  favour.  This  must  be  taken  up  on  Monday  not  being 
advised — I  can  not  live.  "  J.  S." 

That  letter  contained  the  following  telegraphic  message : — 

*'  Forwarded  from  Dublin  station,  and  received  at  the  Strand  station, 
February  16,  1856. 

"From  James  Sadlcir,  30,  Merrion  Square  (South),  Dublin,  to  John 
Sadleir,  Esq.,  M.P.,  Reform  Club,  Pall  Mall,  London.— AE  right  at  all  the 
branches — only  a  few  small  things  refused  there.  If  from  twenty  to  thirty 
thousand  over  here  on  Monday  morning  all  is  safe." 

"Witness  (to  Mr.  Manning)  said  he  found,  on  applymg  to  Mr.  Uzielli, 
that  nothing  was  due  upon  the  draught  mentioned  in  the  letter  which  had 
just  been  read,  and  that  that  gentleman  had  anticipated  the  request  to  have 
it  cancelled.  The  "J.  Gumey"  named  in  the  letter  was  lately  one  of  the 
firm  of  Wilkinson,  Gumey,  and  Stevens. 

The  Coroner  said,  in  the  letter  which  the  witness  would  next  read 
names  were  given  of  parties  who  were  stated  by  the  -n-riter  to  be  innocent. 
One  of  the  gentlemen  so  referred  to  was  in  the  room,  and  he  (the  Coroner) 
shoidd  certainly  not  allow  his  name  to  be  read  if  he  objected  to  it. 

Witness  then  read  the  letter  as  follows,  Mr.  Norris,  to  whom  allusion 
was  made  by  the  Coroner,  having  waived  all  objection  to  his  name  being 
read  in  public : — • 

"  11,  Gloucester  Terrace,  16  February,  1856. 

"  Dear  Robert — To  what  infamy  have  I  come  step  by  step— heaping 
crime  upon  crime — and  now  I  find  myself  the  author  of  numberless  crimes 
of  a  diabolical  character  and  the  cause  of  ruin  and  misery  and  disgrace  to 
thousands — aye  to  tens  of  thousands. 

*'  Oh  how  I  feel  for  those  on  whom  all  this  ruin  must  fall — I  could  bear 
all  punishments  but  I  could  never  bear  to  witness  the  sufferings  of  those 


rA.CT8,   FAILVBES,   XSV   TUA.VBB.  253 

on  whom  I  hare  brought  such  ruin — It  must  be  better  that  I  should  not 
live. 

"No  one  has  been  privy  to  ray  crimes — they  sprung  from  my  own 
cursed  brain  alone — I  have  swindled  and  deceived  without  the  knowledge 
of  any  one — Stevens  and  Norris  are  both  innocent  and  have  no  knowledge 
of  the  fabrication  of  Deeds  and  forgeries  by  me  and  by  which  I  liave  sought 
to  go  on  in  the  horrid  hope  of  retrieving. 

"  It  was  a  sad  day  for  all  when  I  came  to  London. 

•*  I  can  give  but  Uttle  aid  to  unravel  accounts  and  transactions. 

"  There  are  serious  questions  as  to  my  interest  in  the  Grand  Jimction 
and  other  undertakinpjs. 

"  Much  will  be  lost  to  the  creditors  if  these  cases  are  not  fairly  treated. 

"The  Grand  Junction  the  East  Kent  and  the  Swiss  Eailways  the  Rome 
line  the  Coal  Co  are  all  liable  to  be  entirely  lost  now — so  far  as  my  assetts 
are  concerned. 

"  I  authorize  you  to  take  possession  of  all  my  letters  papers  property 
&.C  &.C  in  this  house  and  at  Wilkinsons  and  18  Cannon  Street. 

"  Return  my  Brother  his  letters  to  me  and  all  other  papers — The  prayers 
of  one  6o  wicked  could  not  avail  or  I  would  seek  to  pray  for  those  I  leave 
after  me  and  who  will  have  to  suffer  such  agony  and  all  owing  to  my  crimi- 
nal acts. 

"  Oh  that  I  had  never  quitted  Ireland — Oh  that  I  had  resisted  the  first 
attempts  to  laimch  me  into  speculations. 

"  If  I  had  had  less  talents  of  a  worthless  kind  and  more  firmness  I 
ii.ight  liave  remained  as  I  once  was,  honest  and  truthful — and  I  would  have 
lived  to  see  my  dear  Father  and  Mother  in  their  old  age — I  weep  and  weep 
now  but  what  can  that  avail.  "  J.  Sadleie. 

"  Robert  Keating,  Esq.,  M.P., 
Shamroque  Lodge,  Clapham." 

The  reading  of  this  letter  produced  a  great  sensation  in  court.  The 
witness  himself  was  much  affected,  and  when  he  came  to  the  touching 
reference  by  the  deceased  to  his  aged  father  and  mother,  his  emotion  became 
so  great  that  be  was  obliged  to  pause  till  it  had  subsided. 

Witness  proceeded  to  say  that  he  had  apphed  to  Mrs.  James  Sadleir  for 
the  letter  written  by  the  deceased  to  her  (his  sister-in-law)  on  the  night 
preceding  his  death.  He  would  read  that  lady's  letter  if  the  Coroner 
wished  it. 

The  Coroner  thought  it  desirable. 

Witness  read — 

"Dublin,  Feb.  23,  1856. 

"  Dear  Mr.  Keating. — I  only  received  your  letter  on  Wednesday,  tho 
20th  inst.,  here  this  morning.  I  now  enclose  you  the  letter  I  received 
from  poor  unfortunate  John  Sadleir.    It  may  throw  gome  light  on  the  state 


254  TACTS,   TAILTJEES,   AND   FEAUDS. 

of  his  mind  at  the  time  he  -wrote  it.    As  you  -will  perceive,  he  neither 
addresses  me  in  his  usual  manner,  nor  eren  adds  his  signature. 
"  Please  be  careful  of  the  enclosed  letter,  and  return  it  to  me, 
"  Believe  me  yours  sincerely, 

"  Emma  Sadleib. 
"  Eobert  Keating,  Esq.,  M.P.,  21,  Lombard 
Street,  London." 

The  enclosure,  which  witness  said  was  in  the  handwriting  of  the  de- 
ceased, was  as  follows : — 

"  James  is  not  to  blame — I  alone  have  caused  all  this  dreadftd  ruin. 

"  James  was  to  me  too  fond  a  Brother  but  he  is  not  to  blame  for  being 
deceived  and  led  astray  by  my  diabolical  acts. 

"  Be  to  him  at  this  moment  all  the  support  you  can.  Oh  what  would 
I  not  suffer  with  gladness  to  save  those  whom  I  have  riiined. 

"  My  end  will  prove  at  least  that  I  was  not  callous  to  their  agony." 

Witness,  in  reply  to  the  Coroner,  said,  in  compliance  with  the  deceased's 
request,  he  had  taken  possession  of  Ms  letters  and  property,  except  the 
papers  which  he  left  at  Mr.  "VYUkinson's,  of  which  Mr.  Morrough,  sohcitor, 
of  Denmark  Street,  DubUn,  had  taken  the  care. 

Mr.  Josiah  Wilkinson,  of  the  firm  of  Wilkinson,  Gumey,  and  Stevens, 
sohcitors,  2,  Nicholas  Lane,  said — The  deceased  came  to  me  on  the  morning 
of  Satiu-day  preceding  his  death,  and  suggested  that  I  covdd  raise  some 
money  with  the  view  of  assisting  the  Tipperary  Bant.  He  showed 
me  some  telegraphic  messages  he  had  received  from  Ireland  on  the  subject 
of  their  wants.  He  had  several  schemes  by  which  he  thought  I  could  assist 
him  in  raising  money ;  but,  after  going  into  them,  I  told  Tu'm  I  could  not 
help  him,  the  schemes  being  such  as  I  could  not  recommend  or  adopt.  He 
then  became  very  excited,  put  liis  hand  to  his  head,  and  said,  "  G-ood  Grod, 
if  the  Tipperaiy  Bank  shoidd  fail  the  fault  will  be  entirely  mine,  and  I 
shall  have  been  the  ruin  of  htmdreds  and  thousands."  He  walked  about 
the  oiSce  in  a  very  excited  state,  and  urged  me  to  try  and  help  him,  be- 
cause, he  said,  he  could  not  Hve  to  see  the  pain  and  ruin  inflicted  on  others 
by  the  cessation  of  the  bank.  The  interview  ended  in  this,  that  I  was  un- 
able to  assist  him  in  his  plans  to  raise  money.  He  had  not  been  in  the 
habit  of  coming  into  my  oifice  for  a  considerable  time  until  a  few  days 
before  his  death,  we  having  had  some  difference.  My  partner.  Mi-.  Stevens, 
went  to  Dublin  that  (Saturday)  evening,  at  my  suggestion,  with  a  security 
or  deed  belonging  to  me,  which  I  wanted  registered  there.  I  should  state 
that  Mr.  Sadleir  has  written  to  me  from  time  to  time  to  pay  sums  of  money 
for  him,  which  I  have  done,  and  some  of  which  he  had  repaid  me.  The 
money,  notwithstanding,  which  I  had  advanced  for  him  at  length  became 
so  large  in  amount,  that  I  asked  him  to  give  me  a  security  for  it,  wliich  he 
did.    About  six  weeks  before  he  died  I  remembered  that  the  security  was 


TACTS,   FA-ILXTBES,   AND   FEA.UDS.  255 

not  registered,  and,  when  I  found  the  Tipperary  Bonk  was  in  difBculty,  I 
determined  to  have  it  registered.  It  was  with  that  view  that  I  requested 
my  partner  to  take  it  to  DubUn.  On  arriving  there  he  found  it  to  be  a 
forgery.  The  security  he  lodged  with  me  purported  to  be  a  deed  given  on 
the  purchase  of  an  estate  in  the  Encumbered  Estates  Court.  It  was  signed 
by  two  of  the  commissioners  of  that  coxirt  and  by  two  attesting  witnesses 
in  two  different  parts  of  the  deed,  and  not  a  single  signature  was  genuine. 
(Sensation.)  It  had  a  genuine  seal  of  the  Encumbered  Estates  Coxirt 
attached  to  it,  and  the  commissioners  themselves  admit  the  seal  to  be 
genuine.  That  seal  might  have  been  transferred  from  some  other  genuine 
deed  to  the  spurious  one,  because  the  seal  of  the  coiu^  is  not  impressed  on 
the  document  or  in  wax,  but  on  a  large  wafer,  and  attached  to  it.  There 
is  such  an  estate  as  the  deed  purports  to  convey  to  me.  I  have  heard  that 
a  large  sum  of  money  was  given  to  the  deceased  in  my  oiHce  on  the  Satur- 
day before  he  died.  I  have  not  heard  anything  of  it  since.  It  is  not  a 
matter  of  which  I  have  any  personal  knowledge.  I  cannot  say  who  told 
me  of  that  circumstance,  there  have  been  so  many  rumours  about  the 
matter. 

The  Coroner  said  the  witness  might  perhaps  be  aware  that,  in  cases  of 
this  kind,  an  inquiry  into  property  was  a  legitimate  portion  of  the  inves- 
tigation, and  might  be  carried  infinitely  further  than  he  had  yet  carried 
this  inquiry. 

Witness  repeated  that  he  knew  nothing  of  his  own  knowledge  of  the 
matter  to  which  the  Coroner  referred.  Mr.  Sadleir  came  in  and  out  of  his 
(witness's)  oiBce  once  or  twice  on  the  Saturday,  and  every  time  he  saw  him 
he  was  in  the  greatest  possible  excitement.  lie  (witness)  attributed  his 
death  to  his  excitement  about  the  Tipperary  Bank,  and  to  his  knowledge 
that  he  (witness)  was  about  to  send  his  deed  over  to  Dublin  for  rtgis- 
tration.  A  great  many  rumours  were  afloat  about  forged  deeds,  but  he 
(witness)  knew  of  no  other  forged  deed  than  his  own.  Several  of  Mr.  Sad- 
leir's  deeds  liad,  from  time  to  time,  passed  through  his  hands  to  persons 
who  had  advanced  money  upon  them  ;  but  he  (witness)  had  no  reason  to 
believe  that  any  one  of  those  deeds  was  not  genuine.  He  did  not  tliink 
there  was  a  single  person  who  had  the  deceased's  confidence.  He  was  a 
most  reserved  man.  It  was  extremely  difficult  to  get  any  information  from 
him  beyond  what  he  chose  to  impart.  He  beUeved  Mr.  Sadleir  had  written 
the  letters  which  had  been  produced  imder  great  excitement.  Ho  (witness) 
knew  much  of  his  aflairs,  and  he  believed  tliere  was  much  in  those  letters 
that  was  not  correct. 

The  Coroner  said  that  statement  would  give  rise  to  a  most  important 
question ;  and  he  asked  Mr.  Manning,  as  the  representative  of  the  family 
of  the  deceased,  if  be  was  prepared  to  show  that  Mr.  Sadleir's  own  state- 


256  FACTS,   rAILTJEES,    AND   FEArDS. 

ments  as  to  Ms  forgeries  and  crimes,  and  the  ruin  and  misery  lie  had 
heaped  upon  others,  were  delusions. 

Mr.  Manning  replied  that  he  was  not.  All  the  information  in  his  pos- 
session was  now  before  the  Court. 

The  Coroner  said  if  Mr.  Manning  had  been  prepared  to  show  that,  the 
testimony  would  be  most  important.  The  failure  of  the  Tipperai-y  Bank 
was  a  reality,  as  was  also  the  forged  deed,  but  they  had  had  no  eyidence  of 
any  other  crimes  committed  by  the  deceased. 

Mr.  Keating  said  up  to  that  moment  no  document  appeared  to  have 
turned  up  to  bear  out  the  deceased's  statements  of  his  forgeries,  except 
that  of  Mr.  Wilkinson.  What  might  hereafter  be  discovered  it  was  im- 
possible to  say. 

Mr.  Norris  here  stated  that  Mr.  Gumey  had  told  him  that  he  gave 
Mr.  Sadleir  £13,000  in  bank-notes  before  he  left  the  City  on  the  Saturday 
afternoon  before  his  death.  (No  trace  of  this  sum  has  since  been  dis- 
covered.) 

Mr.  Keating  said  the  deceased  had  told  him  there  was  a  £1000  note 
among  his  money,  but  that  had  not  been  found. 

The  Coroner  said  it  was  important  to  know  whether  the  statements  of 
Mr.  Sadleir  respecting  himself  were  founded  in  fact.  Had  he  committed 
the  crimes  and  offences  wliich  he  imputed  to  liimself  ?  If  he  had  not,  the 
jury  could  scarcely  have  any  hesitation  in  concluding  that  he  was  a  man  of 
unsound  mind,  and  acting  under  delusions  at  the  time  he  destroyed  him- 
self. He  was  prepared  to  adjourn  the  inquiry  for  the  purpose  of  obtaining 
further  testimony  on  that  point  if  the  jury  or  the  friends  of  the  deceased 
desired  that  he  shoidd  do  so.  The  question  of  property  was  an  exceedingly 
important  one  in  this  case,  because  if  Mr.  Sadleir  had  destroyed  himself 
while  of  sound  mind  he  had  committed  self-murder,  and  his  property,  what- 
ever it  might  be,  would  be  forfeited  to  the  Crown.  The  deceased  said  he 
had  been  guilty  of  numberless  crimes  of  a  diabolical  character,  and  the 
cause  of  ruin,  misery,  and  distress  to  thousands  and  tens  of  thousand  of 
persons.  After  looking  at  the  evidence  with  the  greatest  possible  care  and 
attention,  he  (the  Coroner)  confessed  he  could  see,  up  to  this  point,  no 
signs  of  insanity  in  the  deceased  whatever ;  but  if  it  should  be  ultimately 
proved  that  the  letters  which  had  been  put  in  were  written  under  the  de- 
lusion that  he  had  committed  offences  which,  in  reality,  he  had  not  com- 
mitted, that  would  be  conclusive  evidence  that  he  was  a  man  of  unsound 
mind.  Under  those  circumstances  he  thought  it  would  be  desirable  to 
adjourn  the  inquest  for  another  week.  The  Crown,  with  regard  to  pro- 
perty in  such  cases,  united  the  powers  of  the  Court  of  Chancery  and  the 
courts  of  common  law.  There  was  hardly,  in  fact,  any  power  more  potent 
or  more  pungent  than  that  which  the  Crown  possessed   in  the  case  of 


FACTS,    FAILURES,   AND   FEAITDS.  257 

persons  who  had  committed  the  crime  offelo  de  se.  Except  on  the  hypo- 
thesis wliieh  had  been  suggested,  he  really  could  see  nothing  in  the  evi- 
dence, so  far  as  it  had  gone,  which  could  lead  to  the  conclusion  that  the 
deceased  was  a  man  of  unsound  mind  at  the  time  he  destroyed  liimself. 
Under  those  circumstances,  he  thought  it  due  to  him  and  his  family,  and 
to  the  interests  of  society  at  large,  that  an  opportunity  shoidd  be  given  for 
further  inqvury. 

The  inquest  was  then  adjourned  until  Tuesday,  the  11th  of  March,  at 
eleven  o'clock. 


THE  SECOND  ADJOrEUl£EIfT. 

On  Friday,  the  11th  of  March,  at  eleven  o'clock,  the  inquest  on  the 
body  of  Mr,  John  Sadleir,  late  member  for  Sligo,  adjourned  from  the  25th 
ult.,  was  resumed  at  the  workhouse  in  Hampstead,  before  3Ir.  Wakley,  the 
coroner  for  Middlesex,  and  the  jury. 

It  will  be  remembered  that,  towards  the  close  of  the  last  sitting  of  the 
Court,  after  the  letters  written  by  the  deceased  in  the  evening  preceding  his 
death  had  been  read,  in  which  he  repeatedly  charged  himself  with  the  com- 
mission of  diabolical  crimes,  the  recollection  of  which,  he  said,  made  it  impos- 
sible for  him  to  live,  Mr.  Josiah  Wilkinson,  a  solicitor,  in  Nicholas  Lane, 
with  whom  Mr.  Sadleir  had  been  long  on  terms  of  intimacy,  and  had  often 
transacted  business,  and  in  whose  office  he  was  several  times  on  the  Satur- 
day before  his  death,  stated  that,  from  his  knowledge  of  the  deceased  and 
his  affairs,  he  did  not  beUeve  he  had  committed  any  crime  which  justified 
the  strong  language  which  Mr.  Sadleir  had  applied  towards  his  own 
conduct.  Mr.  Wakley,  the  coroner,  thereupon  suggested,  that  if  the 
statement  made  by  Mr.  Wilkinson  covdd  be  borne  out  by  evidence,  it 
would  be  material  for  the  jury  to  consider  whether  or  not,  the  deceased,  in 
so  characterizing  his  conduct,  was  acting  under  some  delusion  or  halluci- 
nation, from  which  it  might  be  fairly  inferred  that  he  was  not  of  sound 
mind  when  he  committed  the  act  of  self-destruction.  The  coroner,  at  the 
same  time,  expressed  a  strong  opinion  that,  so  far  as  the  evidence  had  gone, 
he  could  find  nothing  in  it  to  justify  the  conclusion  that  the  deceased  was 
insane  at  the  time  he  took  away  his  ovoi  life.  The  inquiry  was  even- 
tually adjourned  until  this  date,  to  afford  time  for  the  production  of  evi- 
dence, if  any  such  there  might  be,  calculated  to  support  the  belief  of  Mr. 
Wilkinson,  or  otherwise. 

Mr.  W.  T.  Manning,  coroner  of  the  Queen's  Household  and  the  Verge, 
was  again  in  attendance  on  behalf  of  the  relatives  of  the  deceased.  Mv. 
Robert  Keating,  M.P.  for  Waterford,  and  Mr.  Anthony  Norris,  solicitor, 
of  Bedford  Row,  with  both  of  whom  Mr.  Sadleir  held  intimate  relations, 
wera  also  present.  There  waa  a  considerable  nimiber  of  other  persons  in 
the  room  during  the  proceedings. 

8 


258  PACTS,   FAILmES,   AND    FEArDS. 

The  Court  having  been  formally  constituted. 

The  Coroner  asked  Mr.  Planning  if  he  had  any  more  witnesses  to  call. 

Mr.  Manning  said  he  had  not ;  but  there  were  some  documents  to  -which 
he  should  call  the  attention  of  the  Court  presently.  He  would  first  state, 
in  reference  to  questions  asked  at  their  last  sitting,  as  to  a  sum  of  money 
paid  to  Mr.  Sadleir  on  the  Saturday  preceding  his  death,  that  he  had  since 
made  CTCiy  inquiiy  in  his  power,  from  persons  hkely  to  have  any  knowledge 
of  the  matter,  with  the  view  of  ascertaining  the  disposition  of  that  sum  of 
money.  He  held  in  his  hand  the  particulars  respecting  the  notes  handed 
to  Mr.  Sadleir  on  that  day,  from  which  it  appeared  that  the  amount  paid 
to  him  was  £1384,  and  it  was  made  up  of  Bank  of  England  notes  for 
£1000,  £300,  £50,  £20,  and  £10,  and  the  rest  in  cash.  He  (ilr.  Mannmg) 
had  inquu-ed  at  the  Eank  of  England  last  night,  and  found  that  none  of 
those  notes  had  then  been  presented  for  payment.  The  Court  would 
recollect  that  the  eridence  of  Mr.  Wilkinson,  at  their  last  sitting,  was  to 
the  effect  that  he  knew  of  no  other  deed  that  had  been  forged  by  the 
deceased,  except  the  one  given  to  him  (Mr.  Wilkinson),  and  that  several 
deeds  had  passed  through  his  hands  from  time  to  time,  which  had  been 
given  by  the  deceased  as  securities  for  money  advanced  to  him,  which  he  had 
no  reason  to  believe  were  otherwise  than  genuine.  Itfr.  Wilkinson  added. 
that  he  believed  the  statements  made  by  the  deceased  about  himself  (the 
deceased),  in  the  letters  written  shortly  before  his  death,  were  much  exagge- 
rated. He  (Mr.  Mannuig)  might  also  state  that,  since  the  last  sitting  of  the 
Court,  an  investigation  had  taken  place  into  the  securities  held  by  the  London 
and  County  Bank,  for  the  debt  of  the  deceased  to  that  establishment,  and  the 
result,  up  to  a  certain  point,  was  shown  in  a  letter  he  would  read,  which 
had  been  addressed  by  Messrs.  Ereshfield,  the  sohcitors,  to  Messrs.  Hoghtou, 
Laming,  and  Nichol,  the  new  directoi*s  of  the  London  and  Coimty  Bank : — 

"  2few  Bank  Buildings,  London,  March  4. 
"  Gentlemen, — In  compliance  with  the  wi»h  expressed  by  you,  we  beg 
to  assure  you,  that  in  the  investigation  of  the  secm-ities,  held  by  the  London 
and  County  Bank  for  the  debt  of  the  late  Mr.  John  Sadleir,  now  in  progress, 
we  have  not  found  amongst  them  any  forged  deeds  ;  and,  from  the  progress 
of  our  inquiries,  we  have  the  strongest  conviction  that  the  apprehensions 
on  this  ground  are  unfoxmded.  We  remain,  gentlemen,  your  most  obedient 
servants,  "  J.  C.  and  H,  Ebeshfieu)." 

The  Coroner  said,  Mr.  Manning  would  be  aware  that  this  was  a 
statement  which  he  could  not  receive  in  evidence  in  that  shape.  H  any 
importance  was  to  be  attached  to  it,  the  parties  from  the  bank  ought  to 
have  been  before  the  Court,  in  order  that  the  jury  might  learn  from  them 
the  natm-e  of  the  investigation  in  question. 


FACTS,   FAILUBES,   AND   FHAl'DS.  259 

Mr.  JIauning  said,  he  only  put  it  in  for  what  it  was  worth,  to  show 
that  many  of  the  rumours  as  to  forgeries  committed  by  the  deceased  were 
not  founded  in  fact,  and  that  ho  (Mr.  Manning)  had  no  other  means  of 
contradicting  those  rumours. 

Tlie  Coroner  reminded  Mr.  Manning  that  the  commission  of  forgery, 
more  especially  with  reference  to  Ireland,  had  now  become  matter  of 
notoriety  through  the  usual  channels  of  public  information. 

Mr.  Manning  did  not  think  that  the  tribunal  of  the  coroner  could 
venture  to  investigate  charges  of  forgery  ;  and  if  they  were  to  try  this 
case  with  reference  to  mere  public  reports,  he  apprehended  there  would  be 
no  end  to  it.  He  might  add  that,  since  their  last  meeting,  he  had  investi- 
gated the  rights  of  the  Crown  in  reference  to  any  property  the  deceased 
might  have  left,  and  in  anticipation  of  the  jury  coming  to  the  conclusion 
tlmt  he  was  &felo  de  se.  The  coroner,  on  the  last  occasion,  had  rightly 
said  that,  in  ordinary  cases,  the  right  of  the  CroAvn  interposed  in  the  event 
of  a  verdict  of  felo  de  se ;  but  they  all  knew  how  the  Crown  dealt  with 
such  cases.  The  Crown,  first  of  all,  respected  the  rights  of  creditors,  and 
allowed  administration  to  be  granted  to  a  creditor,  with  a  view  to  the  dis- 
tribution of  the  property  of  the  deceased  among  his  creditors  generally. 
That,  however,  would  not  be  the  casein  the  present  instance.  He  held  in 
his  hand  certain  letters  patent,  by  which  Edward  VI.  granted  to  Sir  Thomas 
Wrothc,  his  heirs  and  assigns,  the  manors  of  Northal,  Downbames,  and 
Hampstead,  with  all  their  appurtenances,  rights,  and  members,  in  the 
county  of  Middlesex,  lately  parcel  of  the  lands  and  possessions  of  the 
bishopric  of  Westminster,  including,  among  other  things,  "  all  chattels 
waived,  estrays,  goods  and  chattels  of  felons,  fugitives,  persons  outlawed 
and  put  in  exigent,  or  in  any  any  other  manner  whatsoever  condemned  or 
convicted,  felons  of  themselves,  and  deodands."  Kow,  that  document, 
which  he  would  put  in,  raised  a  very  grave  question,  because  it  was  clear 
that,  under  the  words  he  had  just  read,  the  whole  of  the  deceased's  goods 
and  chattels,  and  every  right  he  possessed,  except  his  estates  of  inheritance, 
would  go  to  the  present  lord  of  the  manor  of  Hampstead,  witliin  which  the 
body  of  the  deceased  was  found,  in  whom,  by  a  regular  course  of  legal 
devolution,  the  projjerty  granted  by  the  letters  patent  of  Edward  VI.  was 
now  vested ;  and  those  rights  would  go,  too,  to  the  exclusion  of  creditors. 

The  Coroner  asked  if  those  rights  had  ever  been  exercised. 

Mr.  Manning  did  not  know  that  they  had  or  had  not,  but  he  did  not 
apprehend  that  this  affected  the  question,  because  there  was  a  positive  grant 
from  the  King ;  and  if  the  rights  granted  by  it  had  any  existence,  thero 
was  no  doubt  whatever  that  the  present  lord  of  the  manor  of  Hampstead 
would  bo  entitled  to  hold  the  goods  of  the  deceased  discharged  from  the 
payment  of  the  debts  of  the  deceased.  With  that  observation  he  would 
leave  that  part  of  the  case  to  the  jury. 


2G0  TACTS,    .TAILUEES,   A^'D   TEAUDS, 

The  Coroner  said  Mr.  Manning  would  be  aware  that  the  juiy  of  them- 
selves could  not  decide  that  point,  and  that  it  would  hare  to  go  elsewhere 
for  decision. 

Mr.  Manning  said  he  was  aware  of  that,  but  he  wished  to  place  the 
whole  of  the  facts  before  the  jury,  and  to  show  them  that  the  Cro\vn  covdd 
be  no  claimant  in  this  case.  He  would  only  add  that  he  did  not  think  he 
could  usefully  occupy  their  time  by  calling  further  eyidence.  The  case 
must  noAv  rest  on  the  evidence  which  had  been  already  adduced.  Eut  the 
unmeasiu'ed  language  in  which  the  deceased  had  spoken  of  his  own  crimes 
appeared  to  him  to  raise  a  serious  question  as  to  the  state  of  his  mind  at 
the  time  he  committed  the  act  of  self-destruction.  Some  evidence  had 
been  given  to  show  the  presence  of  opium  to  some  small  extent  in  the 
body  of  the  deceased  at  the  time  of  the  post  mortem  examination.  What- 
ever inference  might  be  deducible  from  that  fact,  he  thought  it  would  only 
be  charitable  to  presimie,  when  they  considered  the  state  of  intense  and 
agonizing  excitement  in  which  the  deceased  had  been  proved  to  be  through- 
out the  whole  of  the  Saturday  preceding  his  death,  that  he  was  not  to  be 
held  responsible  for  what  he  did  on  that  day,  in  the  state  of  mind  in  which 
he  was.  That,  he  thought,  must  have  been  their  conclusion,  if  this  inquiry 
had  been,  instead  of  its  present  form,  an  issue  from  the  Court  of  Chancery 
to  try  the  state  of  mind  in  which  the  deceased  had  disposed  of  hia 
property. 

Mr.  2\ichol,  the  surgeon  who  performed  the  post  mortem  examination, 
was  here  recalled  by  the  coroner,  and  stated,  in  reply  to  a  question  by  liim, 
that  on  a  subsequent  investigation  of  the  contents  of  the  stomach  of  the 
deceased,  he  found  traces  of  a  substance  which  he  conceived  to  be  opium. 

Mr.  ]\Ianning,  resuming,  submitted  that  the  extraordinaiT  coolness  with 
which  the  deceased  had  acted  under  circumstances  which  would  have 
driven  any  ordinary  man  to  madness,  might  be  attributable  to  liis  habitual 
indulgence  in  a  stimulant,  such  as  opium,  which  would  elevate  him  for  a 
time,  but  would  afterwards  leave  him,  when  its  influence  had  subsided, 
in  a  state  of  despondency.  He  contended  that  the  deceased  on  the  evening 
preceding  his  death  must  have  at  length  been  completely  crushed  and 
reduced  to  a  hopeless  state  of  depression,  and  that  in  such  a  state  of  mind 
he  had,  in  a  hasty  and  evil  moment,  rushed  out  and  committed  the  act  of 
suicide.  Taking  all  the  circumstances  into  consideration,  he  submitted 
that  the  juiy  could  come  to  no  other  conclusion  than  that  the  deceased 
was  not  of  sane  mind  when  he  raised  the  hand  which  deprived  liim  of  life. 

The  Coroner  then  proceeded  to  charge  the  jury.  He  said,  there  being 
no  further  evidence  to  be  adduced,  he  woidd  proceed  to  direct  their  attention 
to  the  most  important  points  in  this  case,  and,  in  doing  so,  he  would  not 
occupy  their  time  by  reading  the  depositions  which  had  been  taken  in  the 
course  of  the  inquiry,  but  would  confine  himself  to  a  review  of  the  facts 
that  had  come  out  in  evidence.     He  would  also  endeavoiu-  as  much  as  pos- 


FACTS,    FAILURES,   A>'D   TEAUDS.  2G1 

siblo  to  apply  1»J3  mind  exclusively  for  the  time  to  the  subject  now  under 
consideration — a  matter  of  some  difficulty,  as  they  would  believe  when  he 
told  them  that  on  the  preceding  day  he  had  held  no  less  than  seven  inquests, 
one  of  which  was  a  case  of  suicide  and  another  of  child  burning,  so  rapidly 
did  the  current  of  horrors  run  through  the  mind  of  a  man  who  filled  the 
office  that  he  now  did.  The  jury  had  given  an  almost  unexampled  degree 
of  attention  to  this  case,  and  he  had  no  doubt  that  they  had  a  perfectly 
clear  recollection  of  all  the  facts  that  had  been  given  in  evidence.  He  had 
consequently  no  fear  that  they  would  not  come  to  a  strictly  just  and 
impartial  conclusion.  This  investigation  had  been  of  a  very  distressing 
nature,  but  there  was  a  duty  imposed  upon  jurymen  by  their  oaths,  and 
from  that  duty  he  had  no  apprehension  that  the  jury  in  tliis  case  would  be 
disposed  to  swerve.  The  unfortunate  gentleman,  the  cause  of  whose  death 
they  were  now  investigating,  was  named  John  Sadleir,  and  was  a  member 
of  Parliament  for  the  borough  of  Sligo,  in  Ireland ;  and  they  would  recol- 
lect the  circumstances  under  which  his  body  was  found  on  Hampstead 
Heath  on  the  morning  of  Sunday,  the  17th  of  last  month,  as  related  by  the 
witness  Bates.  It  appeared  that  by  the  side  of  the  body  of  the  deceased  a 
silver  cream-jug  and  a  case  of  razors  were  found,  and  in  his  pocket  a  shp 
of  paper,  on  which  were  the  words  in  his  own  handwriting,  "  John  Sadleir, 
11,  Gloucester  Square,  Hyde  Park."  Subsequently  a  careful  examination 
of  the  body  was  made  by  llr.  Nichol,  and  it  was  proved,  he  thought,  most 
indisputably,  and  nothing  ever  more  tndy,  that  the  death  of  the  unfor- 
timate  gentleman  was  caused  by  his  taking  a  very  large  quantity  of  the 
essential  oil  of  bitter  almonds.  A  bottle  containing  some  of  that  poison 
was  found  by  his  side,  and  labelled  with  the  words,  "  Essential  oil  of  bitter 
almonds,"  and  the  unfortunate  man  had  taken  so  large  a  quantity  of  it 
that  every  part  of  his  viscera  was  affected  by  the  smell.  Taking  it,  there- 
fore, as  beyond  question  that  he  died  from  the  effects  of  poison,  and  that 
poison  was  administered  by  liis  o\vn  hand,  the  next  step  of  the  jury 
would  be  from  death  to  life,  and  to  consider  what  were  the  circumstances 
immediately  preceding  the  taking  the  poison  by  the  deceased.  With 
reference  to  the  manner  in  which  the  poison  was  purchased,  he  thought  it 
but  fair  to  say  that  Mr.  Maitland,  the  chemist,  and  his  assistant  stood 
entirely  acquitted  of  all  blame,  as  did  also  the  butler  of  the  deceased.  Tlie 
manner  of  ordering  the  poison  and  the  quantity  ordered  were  quite  suffi- 
cient to  throw  any  person  off  his  guard.  It  was  really  a  most  unpleasant 
duty  to  go  into  the  other  part  of  this  inquiry.  It  was  calculated  to  involve 
them  all  in  a  labyrinth  of  doubt ;  and  ho  must  repeat — wliat  he  had  said 
on  a  previous  occasion — that  he  most  deeply  deplored  that  they  had  to  make 
any  such  investigation.  He  believed  such  inquiries  to  be  utterly  useless, 
and  that  they  led  in  many  cases  to  the  most  painful  mistakes.  He  referred 
to  the  state  of  mind  in  which  a  person  was  supposed  to  be  who  had  com- 
mitted the  act  of  self-destruction.    At  the  same  time,  he  was  convinced 


2G2  PACTS,   TAILrEES,    A^D   PEArDS. 

that  the  practice  among  jurymen  of  finding  verdicts  of  insanity  in  criminal 
cases  was  an  exceedingly  pernicious  one,  for  by  that  practice  the  worst  of 
criminals  often  escaped  justice,  and  every  now  and  then  a  madman  was 
executed.  Mr.  Manning  had  alluded  to  an  issue  from  the  Court  of  Chancery. 
He  (the  coroner)  was  not  sorry  that  he  had  done  so.  AYhat  happened  in 
such  a  case  ?  There  were  frequently  in  such  rnquii-ies  twenty-four  intelligent 
jurymen,  several  medical  practitioners  of  high  reputation,  sis  or  eight 
remarkably  clever  counsel,  and  as  many  sharp  attorneys.  They  sat  from 
day  to  day  conducting  such  an  investigation  with  the  utmost  care  and 
assiduity  into  the  state  of  mind  of  a  party  who  was  before  them.  They 
had  the  individual  present  whose  sanity  was  questioned,  and  by  the  inge- 
nuity of  counsel  his  brain  was  rasped,  as  it  were,  for  the  purpose  of 
ascertaining  ita  quahty.  "What  frequently  was  the  result  ?  Why,  at  the 
end  of  a  protracted  inquiry,  four  or  five  medical  gentlemen  beheve  him  to 
be  sane,  and  as  many  more  think  him  insane,  and  there  was  a  small  majority 
of  the  jury  on  one  side  of  the  question.  If  that  was  the  state  of  things 
before  a  Court  so  constituted,  what  was  their  condition  who  composed  the 
coroner's  tribunal,  when  the  person  who  formed  the  subject  of  their  anxious 
inquiry  had  passed  from  among  them,  and  when  they  could  only  form  their 
opinions  from  such  fragments  of  evidence  as  he  had  left  behind  him  ?  Mr- 
Manning  had  also  alluded  to  the  consequences  of  their  verdict ;  but  he 
(the  coroner)  was  bound  to  tell  them  that  they  must  not  take  the  con- 
sequences of  their  verdict  into  consideration  at  all.  The  inquiry  and  the 
verdict  were  quite  legitimate  things  of  themselves,  but  consequences,  whe- 
ther they  were  great  or  small,  narrow  or  wide,  they  must  not  take  into 
account  at  all  in  coming  to  a  decision.  They  must  now  proceed  backward 
to  the  last  link  in  the  chain  of  life.  The  last  pei-son  among  his  domestics 
who  appeared  to  have  seen  the  deceased  alive  was  his  butler,  Elwin.  He 
stated  he  left  him  at  eleven  o'clock  at  night,  and  that,  on  returning  upstairs 
at  a  quarter  to  one  o'clock,  he  found  three  letters  on  the  hall  slab,  two  of 
which  were  addressed  to  Mr.  Keating,  and  the  other  to  Mr.  Norris.  He 
then  ascertained  tliat  Mr.  Sadleir  had  taken  his  great-coat  and  hat  from 
the  haU  and  left  the  house.  After  that  time  they  were  not  aware  that  Mr. 
Sadleir  was  seen  ahve  by  any  person  who  knew  Iiim.  The  butler  added 
that  he  had  lived  with  Mr.  Sadleir  for  eighteen  months,  and  that  his  master 
was  a  man  of  very  sober,  frugal  habits,  and  very  temperate  in  his  mode  of 
life.  He  also  stated  that  he  had  never  kno\vn  him  make  any  attempt  on 
liis  life  before,  that  he  had  observed  nothing  pecuhar  in  his  manner  during 
the  whole  period  he  had  Hved  with  him.  About  a  quarter  to  eleven  o'clock 
on  the  Saturday  evening  Mr.  Norris  left  Mr.  Sadleir,  after  having  been 
with  him  about  half  an  hour,  and  he  stated  that  he  noticed  a  redness  of  the 
eyes,  as  though  Mr.  Sadleir  had  been  weeping.  He  added  that  when  he 
arrived,  Mr.  Sadleir  was  walking  about  the  room,  which,  he  said,  was  a 


TACTS,   FAILUBES,   AKD    IHAUDS.  263 

rerj  unnsual  occurrence  Mrith  him,  and  that  while  be  was  there  the  deceased 
received  a  telegraphic  message,  in  these  words  : — 

"  Forwarded  from  Dublin  Station,  and  received  at  the  Strand  Station, 
Feb.  16,  1856. — From  James  Sadleir,  30,  Merrion  Square  (South),  Dublin, 
to  John  Sadleir,  Esq.,  M.P.,  Eeform  Club,  Pali  Mall,  London.— All  right 
at  all  the  branches — only  a  few  small  things  refused  there.  If  from  20,000 
to  30,000  over  here  on  Monday  morning,  all  is  safe." 

Probably  at  that  time  Mr.  Sadleir  knew  the  impossibility  of  transmitting 
BO  large  a  sum,  but  the  poison  had  been  sent  for  three  hoiu-s  before  the 
arrival  of  that  message.  It  also  appeared  from  Mr.  Norris's  evidence  that 
he  had  been  with  Mr.  Sadleir  in  the  afternoon  of  that  day,  in  the  city,  at 
Mr.  Gumey's  office,  and  that  he  was  so  impressed  with  the  effect  likely  to 
be  produced  on  the  deceased  by  his  reverses  of  fortune,  that  he  made  tho 
remark  that  he  should  not  be  surprised  if  Mr.  Sadleir  shot  himself.  After 
Mr.  Norris  and  the  butler  had  left,  the  letters  to  Mr.  Keating  and  Mr. 
Korris  appeared  to  have  been  written.  Those  letters,  therefore,  contained 
the  latest  evidence  they  had  as  to  the  condition  of  Mr.  Sadleir's  mind. 
Mr.  Manning  said  he  attached  but  little  importance  to  the  declarations  in 
those  Otters,  but  they  were  presented  to  the  jury  in  the  cliaracter  of  dying 
declarations.  Mr.  Manning  had  truly  stated  that  the  deceased  must  have 
been  in  a  state  of  great  mental  depression,  arising  from  the  consideration 
of  the  losses  and  reverses  that  had  befallen  him.  That  brought  them  to 
the  consideration  of  what  was  insanity.  It  was  not  depression  of  spirits, 
nor  was  it  agony  of  mind.  Not  a  single  sentence  had  ever  yet  been 
written  which  gave  a  correct  definition  of  insanity,  and  he  feared  thero 
never  would.  It  was  a  subject  which  had  engaged  the  prolonged  attention 
of  some  of  tho  ablest  thinkers  that  had  ever  lived.  Many  of  tho  most 
eminent  psychologists  had  over  and  over  again  stated  that  the  whole  thing 
was  involved  in  mystery,  in  consequence  of  the  chameleon-like  character  of 
the  manifestations  and  causes  of  insanity.  If  insanity  could  be  defined  by 
the  word  grief,  sorrow,  remorse,  or  even  despair,  greatly  as  insanity  now 
prevailed,  it  would  exist  then  in  a  thousandfold  greater  degree.  But  what 
they  had  to  decide  with  reference  to  tlie  evidence  was  this — Did  they  be- 
lieve that  at  the  time  Mr.  Sadleir  committed  the  act  of  self-destruction  ho 
was  a  responsible  agent  ? — in  other  words,  that  ho  was  in  such  a  condition 
of  mind  as  made  him  morally  and  legally  responsible  for  his  actions  ?  It 
was  much  to  be  regretted  that  tliat  was  a  subject  beset  with  so  much  diffi- 
culty. He  had  always  observed  that  juries  in  such  cases  were  disposed  to 
lean  towards  tho  side  of  mercy  and  humanity ;  but  it  should  be  borae  iu 
mind,  that  if  mercy  and  himianity  were  to  bo  shown  towards  tho  indi- 
vidual, they  were  equally  to  be  regarded  in  reference  to  society  at  large. 
The  Coroner  then  read  the  letters  written  by  tho  deceased  on  the  night 
before  his  death  to  his  sister-in-law,  Mrs.  James  Sadleir,  Mr.  Keating,  and 


264  FACTS,   FAILTJEES,   Al!fD   FEAUDS. 

Mr.  N'orris ;  and  lie  contended,  on  the  face  of  those  letters  themselres,  that 
Tvhen  the  deceased  stated  in  them  that  he  could  not  live,  his  mind  was  not 
ia  sucli  a  state  of  disturbance  even  as  to  create  any  confusion  of  ideas. 
They  were  written  at  almost  the  last  moment  before  he  died,  and  there  was 
notliing  in  them  that  was  inconsistent  with  the  perfect  retention  of  reasoning 
and  reflecting  powers,  and  the  maintenance  of  a  correct  memory.  At  the 
same  time,  it  was  impossible  not  to  know  and  feel,  from  the  very  manner 
in  which  the  letters  were  expressed,  that  the  deceased  must  have  been 
suffering  the  most  intense  agony.  The  very  act  he  committed  proved  of 
itself  the  mental  suffering  that  drove  him  to  such  a  measure  of  desperation. 
But  stiU,  again,  the  question  arose,  was  he  in  such  a  state  of  mind  as  made 
him  responsible  for  liis  actions  ?  That  was  a  question  which  they  had  to 
answer  by  their  verdict.  In  the  medical  examination  of  the  bodies  of 
suicides,  the  most  minute  and  careful  search  was  made  into  the  state  of 
the  brain.  That  appeared  to  have  been  done  by  Mr.  Nichol  in  this  case, 
but  no  disease  of  the  brain  was  found  to  exist.  They  would  now  take 
every  fact  into  their  consideration  which  had  been  given  in  evidence,  and 
he  was  sure  they  would  in  the  end  come  to  a  strictly  jvist  conclusion.  If 
they  believed  Mr.  Sadleu*  was  irresponsible  for  his  actions,  and  that  he  was 
driven  to  commit  the  act  of  self-destruction  by  some  uncontrollable  im- 
pulse, they  would  say  that  he  was  of  imsound  mind.  But  if,  on  the  other 
hand,  they  beheved  he  was  of  perfect  memory  and  understanding  at  the 
time,  and  that  he  could  have  controlled  that  act  if  he  had  thought  proper 
to  do  so,  they  could  come  to  no  other  conclusion  than  that  he  had  com- 
mitted self-murder.  If,  however,  they  had  a  doubt  on  the  subject,  he 
would  call  on  them  to  give  the  memory  of  the  deceased  the  benefit  of  that 
doubt.  But  if  they  had  no  such  misgiving,  it  was  impossible  they  could 
come  to  any  other  conclusion  than  that  it  was  an  act  oifelo  de  se. 

The  jury  then  retired,  and,  after  an  interval  of  nearly  half  an  hour,  they 
retiumed  into  court,  and  the  foreman  said  they  were  unanimously  of  opinion 
that  the  deceased,  John  Sadleir,  died  by  his  own  hands  when  in  a  perfectly 
sane  state  of  mind. 

The  Coroner  said  he  felt,  after  the  most  deliberate  and  careful  considera- 
tion of  the  whole  evidence,  that  they  could  come  to  no  other  conclusion. 
The  proceedings  then  terminated. 

It  may  be  stated  that  late  at  night  on  the  Tuesday  after  the  deceased 
was  found  dead  on  Hampstead  Heath,  and  after  the  Coroner  had  given 
permission  for  its  interment,  the  body  was  removed  fi-om  the  workhouse  at 
Hampstead  to  the  house  of  the  deceased  in  Gloucester  Square,  Hyde  Park, 
and  on  the  following  Thursday  morning,  at  a  very  early  hour,  interred  in 
Highgate  Cemetery,  in  the  presence  of  a  few  of  his  immediate  relatives 
and  others,  the  burial  service  being  performed  by  a  Roman  CathoKe 
clergyman. 


TACTS,  FAILtTBES,   AKD  FRAUDS.  265 


EEPORT  OF  MR.  COLEMAN, 

THE    ACCOrNTAVT    EMPLOTED    TO    INTESTIOATK     THE    POSITION    OP    TDB 

lO'DOX  AXD   COUXTY  BANK,   AFTER  THE  DISCOTEEY  OP 

THE  SASLEIB  PBATTDS. 

"  36,  Coleman  Street,  August  4, 1856. 

"to  the  DIEECT0E3  OP  THE  LONDON  AND   COUNTY  JOINT-STOCK 
BANKING  COMPANT. 

"Gentlemen, — In  accordance  with  your  request,  I  have  made  a 
general  investigation  of  the  accounts  of  your  Company,  for  the  purpose  of 
testing  their  accuracy,  and  as  your  express  desire  was,  that  I  should  pur- 
sue my  own  views  in  the  inquiry,  without  reserve  or  restriction,  I  hava 
taken  advantage  of  such  opportunity  to  acquaint  myself  with  the  prin- 
ciples of,  and  the  leading  features  appertaining  to,  the  business  carried  on 
by  yoxir  Company,  both  as  regards  the  head  establishment  in  London,  and 
the  sixty-two  branches  in  the  counties  of  Middlesex,  Essex,  Kent,  Surrey, 
Sussex,  Hertfordshire,  Bedfordshire,  Berkshire,  Cambridgeshire,  and  Hunt- 
ingdonshire. 

"  To  attain  this  information  I  first  examined  the  statements  up  to  the 
30th  June  last,  as  sent  from  each  branch.  These  statements  not  only  con- 
tain the  results  requisite  to  make  up  the  balance-sheet,  but  also  set  forth 
in  full  detail  each  several  account,  particularizing  separately  every  bill  dis- 
counted, all  loans  made,  and  the  securities  held  against  them,  and  exhibit 
very  distinctly  every  item  connected  with  the  entire  business.  These  state- 
ments also  contain  remarks  by  the  branch  manager,  elucidating  the  several 
transactions  in  which  he  has  engaged,  thus  giving,  as  far  as  possible,  a 
concise  detail  of  the  whole  business  operations. 

"  In  addition  to  these  statements,  I  have,  where  I  have  found  it  neoes- 
aary,  referred  to  the  reports  of  the  bank  inspectors,  and  by  these  combined 
documents,  have  been  enabled  to  arrive  at  a  general  conclusion  as  to  the 
nature  of  the  Company's  business,  and  the  mode  in  which  it  has  been 
conducted,  and  also  to  form  an  opinion  of  the  value  of  the  business  eo 
carried  on. 

"  The  limited  time  which  has  been  afforded  me  for  this  examination, 
and  the  great  number  of  accounts  (appertaining  to  these  branches), 
amounting  to  nearly  20,000,  precludes  my  expressing  more  than  a  general 
opinion ;  but,  upon  the  whole,  I  am  satisfied  that  the  business  is  a  sound  oncy 
that  it  is  carried  on  with  judgment,  and  is  likely  to  continue  profitable. 

"In  regard  to  the  London  establishment,  I  have  chocked  through  the 
whole  of  the  balances  with  your  auditors,  and  certify  that  tlie  balance- 
sheet  of  30th  June  is  correct  in  figures,  and  exhibits  the  true  balances  of 
the  books. 


2GG  TACTS,   PAILUEES,   AND   FEATJDS. 

" In  an  inquiry  of  the  present  nature,  where  so  many  interests  of  im- 
portance are  concerned,  it  would  not  be  proper  to  particularize  any  special 
accounts,  or  to  invade  that  confidence  which  is  reposed  in  the  managers  of 
a  bank ;  but  the  notoriety  of  the  connection  of  your  bank  with  the  "West- 
minster Improvement  Commissioners  and  the  late  John  Sadleii',  require 
that  I  should  specially  notice  those  accounts. 

"  I  have  cai'efully  examined  into  the  debts  due  in  connection  with  the 
"Westminster  Improvements.  The  securities,  held  by  the  bank  for  advances 
on  these  accounts,  consist  of  mortgages  of  freehold  and  leasehold  proper- 
ties, and,  from  the  valuations  made  by  the  gentlemen  employed  for  this 
purpose,  it  appears  that  the  bank  may  fairly  expect  to  realize  fi-om  them 
the  amount  of  these  advances. 

"  In  reference  to  the  debt  due  from  the  late  John  Sadleir,  I  may  state 
that  the  original  amount  has  been  much  reduced,  that  the  realization 
of  securities  is  proceeding  steadily,  and  I  see  no  reason  to  doubt  that  the 
whole  will  be  discharged  in  the  course  of  twelve  months,  with  the  exception 
of  a  sum  due  on  mortgage,  which  is  the  subject  of  legal  proceedings.  On 
the  validity  of  this  it  would  not  be  proper  for  me  to  offer  an  opinion. 

"I  have  examined  the  various  securities,  consisting  of  Consols,  Ex- 
chequer Bills,  East  India  and  other  Stocks,  which  are  taken  credit  for  in 
the  balance-sheet  of  the  30th  June,  and,  upon  the  whole,  am  satisfied  that 
they  represent  the  value  taken  on  that  date. 

"  The  remaining  general  securities  I  have  also  looked  into,  and  I  am  of 
opinion  that  they  are  satisfactory. 

"  In  making  these  remarks,  I  must  not  be  understood  as  expressing  an 
opinion  that  each  of  the  securities,  of  every  description,  held  by  the  bank, 
is  of  the  full  value  of  the  sums  which  they  represent,  or  that  all  debts 
taken  will  realize  the  full  amounts  at  which  they  are  stated ;  but  taking 
the  entire  of  these  matters  into  consideration,  I  believe  that  the  amount 
that  now  stands  to  the  credit  of  your  reserve  fund  will  be  amply  sufScient 
to  meet  all  contingencies  that  may  arise  upon  the  eventual  realization  of 
these  assets. 

"  These  observations  will  naturally  force  upon  you  the  necessity  of  con- 
sidering how  far  it  may  be  expedient  for  you  to  create  a  further  reserve  on 
your  current  business. 

"  I  trust  it  may  not  be  considered  a  departure  from  my  strict  line  of 
duty,  to  direct  your  attention  to  the  amount  of  your  paid  up  capital,  when 
taken  in  comparison  with  the  enormous  extent  of  your  present  business 
operations ;  operations,  I  should  imagine,  far  exceeding  the  most  sanguine 
expectations  of  any  persona  connected  with  your  establishment,  and  opera- 
tions likely,  as  far  as  I  can  see,  to  be  still  further  extended.  I  feel  strongly 
how  important  it  is,  that  the  foundation  of  such  an  establishment  should 
be  of  sufBcient  strength  and  solidity  to  carry  its  fuU  weight,  and  inspire 


FACTS,   FAILURES,   AND   TBAUDS.  267 

confidence  in  the  public ;  and  I  have  ventured  to  call  to  your  attention 
the  point,  being  satisfied  that  it  deserves  your  serious  consideration. 

"  In  conclusion,  I  have  to  state  that,  in  my  opinion,  the  general  busi- 
ness carried  on  in  your  various  departments,  with  but  few  exceptions,  is 
both  sound  and  profitable ;  the  mode  in  which  your  branch  returns  are 
made,  and  the  supervision  of  your  inspectors,  is  most  cfiective ;  and,  when 
I  find  that  your  depositors  in  the  country  exceed  6100  in  number,  whose 
deposits,  after  providing  sufficient  capital  for  the  whole  of  the  requirements 
of  the  sixty-two  branches,  leaves  an  amount  of  one  million  and  a  quarter 
to  one  million  and  a  half  of  money,  for  profitable  employment  by  the 
head  establishment,  I  feel  that  confidence  which  you  have  gained  forms 
a  most  important  element  in  the  soundness  and  general  stability  of  your 
Company. 

"  I  have  to  express  my  thanks  to  you,  for  the  unrestricted  manner  in 
which  yoli  have  permitted  me  to  conduct  this  inquiry ;  and  also  to  Mr. 
M'Kewan,  your  manager,  Mr.  Gray,  his  assistant,  and  Mr.  Norfolk,  your 
principal  inspector,  for  the  great  assistance  which  they  afforded  me,  and 
for  the  unreserved  manner  in  which  they  so  promptly  replied  to  all  my 
inquiries. — I  am,  gentlemen,  yours  faithfully, 

"J.  E.  CoLEMAX,  Public  Accountant." 


2G8  TACTS,  TAILrUES,   A^Ji   FEAUBS. 


CHAPTEE  YII. 

THE   EOTAL   BEITISH   BA>'K — ITS    SUSPENSION  AND    GZXEEAL 
MISMANAGEMENT. 

Its  Organization  and  proposed  Course  of  Business — The  Attempt  to  de- 
Tclop  the  Scotch  System — Parties  identified  with  its  Formation — The 
Non-Success  of  Business — The  Attempts  to  Force  the  Popularity  of 
the  Estabhshment — Opening  of  Branches  in  various  Districts — The 
Promoters  of  the  Undertaking,  Mr.  John  M'Gregor,  M.P.,  Mr.  Came- 
ron, and  Mr.  Mullins — Salaries  paid  to  Officials — The  Discount  Ope- 
rations of  the  Bank — The  Debts  of  the  Directors,  Manager,  etc. — 
Issue  of  new  Shares — Mr.  Humphrey  Brown's  Account — DifBculties 
of  the  Bank — Loss  of  Capital,  etc. — The  Operation  of  the  Winding-up 
Clause  of  the  Charter— The  Struggle  to  preserve  Position — The  Ulti- 
mate Decadence  of  Business — The  Suspension  in  September,  1856 — 
The  Contest  for  the  Estate  between  the  Court  of  Chancery  and  the 
Court  of  Bankruptcy — And  the  Prosecution  and  Trial  of  the  Directors. 

The  affairs  of  the  Eoyal  Britisli  Bank,  and  its  disastrous 
management,  will  long  be  remembered  by  those  who  moved 
in  financial  and  trading  circles  at  the  period.  The  private 
banking  interest  experienced  a  severe  blow  when  the  suspen- 
sion of  Messrs.  Strahan,  Paul,  and  Bates  occurred,  and  the 
joint-stock  banks  obtained  a  temporary  advantage  by  the 
change  of  public  feeling  in  their  favour.  The  course  pursued 
by  the  partners  in  that  case  had  brought  upon  them  the  severe 
condemnation  of  the  public,  and  their  fate  had,  at  that  date, 
elicited  little  expression  of  sympathy  ;  and  most  parties,  look- 
ing to  the  security  of  their  funds,  were  loud  in  their  approval 
of  the  safety  and  responsibility  attaching  to  the  joint-stock 
system.  True  it  was  that  the  Tipperary  Bank  had  failed,  and 
that  the  exposures  in  relation  to  John  Sadleir  had  occasioned 
suspicions  to  be  directed  to  some  quarters,  but  the  suspension 
of  a  metropolitan  joint-stock  bank  was  an  event  barely  contem- 


FACTS,   FAILUBES,   AND   FBAUDS.  269 

plate  J.  Prejudicial  reports  liad  been  frequently  circulated 
respecting  the  Eoyal  British  Bank,  its  management,  and  imme- 
diate liabilities ;  but  these  were  supposed  to  have  emanated 
from  disappointed  or  dismissed  officers,  and  not  to  have  any 
special  foundation  in  truth ;  and  until  within  a  few  weeks  of 
the  very  catastrophe,  even  some  of  the  directors  were  hardly 
prepared  to  find  themselves  reduced  to  the  desperate  condition 
which  an  ultimate  examination  of  accounts  so  clearly  esta- 
blished. Of  course,  when  the  stoppage  took  place,  and  the 
startling  disclosures  which  followed  became  slowly  but  dis- 
tinctly revealed,  the  revulsion  against  the  joint-stock  system 
was  only  too  apparent,  and  for  a  short  period  some  of  the  best 
banks  sufiered  through  the  caution  exercised  by  the  public, 
and  in  one  instance  the  rumours  propagated  assumed  such  an 
importance,  that  the  business  of  the  special  bank,  had  it  not 
been  vigilantly  protected,  would  have  been  brought  to  a  stand. 
But  although  the  Eoyal  British  Bank  suspended,  and  its  de- 
struction, through  the  absence  of  prudent  conduct,  entailed 
disgrace  upon  the  system,  it  was  not,  from  the  first,  nevved  as 
an  institution  which  commanded  a  high  degree  of  public 
favour,  or  attracted  any  extraordinary  amount  of  banking 
business,  for  it  was  based  upon  principles  that  were  in  this 
country  comparatively  novel,  and  novelty  in  mercantile  afiairs 
must  with  Englishmen,  and  Londoners  especially,  be  accom- 
panied with  self-evident  advantages,  and,  above  all,  with  secu- 
rity, to  become  generally  popular.  Nevertheless,  its  trans- 
actions were  sufficiently  extensive  for  its  failure  to  inflict 
serious  loss  upon  a  very  considerable  body  of  customers,  con- 
sisting, unfortunately,  of  that  class  of  persons  who  were  the 
least  able  to  bear  it — small  traders  and  private  individuals  of 
limited  means ;  and  absolute  ruin  upon  a  number  of  innocent 
shareholders,  mostly  in  the  same  rank  of  life,  who,  deceived  by 
the  specious  reports  put  forward  by  a  doubtful  body  of  direc- 
tors, were  induced  to  embark  their  capital  in  a  concern  in  the 


270  PACTS,   TAILUEES,   A^'D   TEArDS. 

general    management    of  wliicli  honour    and   honesty   were 
apparently  wholly  ignored. 

The  project  of  the  Eoyal  British  Bank  was  first  launched 
upon  the  world  in  the  year  1850,  but  it  had  previously  been 
actively  canvassed  and  arranged.  The  prospectus,  it  is  true, 
came  before  the  moneyed  public  unsupported  by  high  authori- 
ties in  the  trade  of  banking,  or  by  the  names  of  known  great 
capitalists.  There  were  no  men  of  mark,  either  as  financiers 
or  millionaires,  upon  the  provisional  list  of  directors,  or 
amongst  the  original  subscribers  ;  but  there  were  M.P.'s,  one 
of  them  a  great  statist,  who  had  been  officially  connected  with 
the  Board  of  Trade,  and  consequently  carrying  some  weight, 
persons  who  had  had  some  experience  in  the  business  of  money 
dealing  in  another  part  of  the  kingdom,  and  others  who,  as 
shipowners  and  traders,  were  engaged  in  transactions  of  mag- 
nitude, and  were  presumed  to  have  extensive  financial  opera- 
tions, and  consequently  influence.  It  was  not,  however,  upon 
the  faith  of  the  names  by  which  the  scheme  was  backed,  but 
the  principles  upon  which  it  was  to  be  carried  out,  that  the 
public  were  invited  to  take  shares,  or  to  become  customers. 
It  was  boldly  averred  that  the  science  of  banldng  was  unknown, 
or,  at  all  events,  unpractised  in  London — that  the  system 
which  prevailed  in  Scotland  was  the  only  one  adapted  to  the 
wants  of  a  commercial  community — and  ingenious  calculations 
were  submitted,  showing  that  a  bank  established  in  London 
upon  the  Scotch  principle,  afibrding  those  facilities,  and  that 
accommodation  in  the  shape  of  discounts  which  the  northern 
banks  supplied,  must  necessarily  realize  profits  which  would 
ensure  to  the  fortunate  shareholders  a  rate  of  dividend  that 
would  exceed  the  liberal  divisions  the  then  existing  metropoli- 
tan joint-stock  banks  were  periodically  making  amongst  their 
proprietors.  To  lend  dignity  to  the  new  institution,  and  to 
afibrd  security  to  the  partners,  a  charter  was  to  be  obtained ; 
and,  to  convey  an  idea  of  the  wide  rauge  of  business  contem- 


FACTS,  rjiiLrnEs,  axd  tiiauds.  271 

plated,  the  title  of  the  "  Eoyal  British  "  •was  adopted.  Tho 
capital,  as  originally  proposed,  was  £100,000,  divided  into 
shares  of  £100  each,  one  half  of  which  was  called  up,  the  usual 
intimation  being  given,  that  as  the  business  extended,  and 
more  capital  was  required,  a  further  issue  of  shares  would  take 
place,  in  the  allotment  of  which  tho  original  proprietors  would, 
it  was  announced,  have  the  preference. 

Hie  great  success  which  had  attended  the  working  of  the 
principal  joint-stock  banks  already  in  active  operation,  afforded 
support  to  the  new  project — and  aided  by  the  indefatigable 
exertions  of  those  whom  the  sequel  showed  had  important 
objects  of  their  own  to  serve,  the  shares  were  eventually  taken 
and  paid  upon,  though  the  amount  had  in  some  degree  to  be 
manufactured,  the  royal  charter  was  obtained,  and  business  com- 
menced. At  the  outset  arrangements  were  made  for  an  extended 
trade.  Seeking  customers  amongst  tradesmen  of  compai*atively 
limited  business,  retailers  and  small  manufacturers,  as  well  as 
merchants,  wholesale  dealers,  and.  large  capitalists,  the  directors 
felt  it  necessary  to  have  branches  in  various  parts  of  the  town, 
and  besides  the  central  establishment  in  Tokenhouse  Yard, 
branch  banks  were  at  once  set  up  in  the  Strand,  in  Lambeth, 
in  Southwark,  and  afterwards  to  these  were  supplemented 
others  in  Islington,  in  Piccadilly,  in  Holbom,  and  in  Pimlico. 

The  bank  once  fairly  upon  its  legs,  the  Scotch  system  was  put 
into  action,  and,  as  fast  as  money  came  into  the  till,  it  was  lent 
out  liberally,  but  acting  upon  the  notion  that  when  a  liberal 
principle  is  set  in  motion,  those  who  ought  to  benefit  by  it  are 
its  authors,  the  managers  and  directors  thought  themselves 
perfectly  entitled  to  supply  their  own  private  wants  as  well 
as  to  attend  to  the  demands  of  their  customers.  They  had 
laid  down  a  rule  that  no  discounts  should  be  allowed  to  parties 
who  had  not  an  open  account  at  the  bank,  either  in  the  shape 
of  deposits  or  a  drawing-account.  And  they  were  required  to 
maintain  at  all  times  a  balance  equal  to  at  least  twenty-live  per 


2/2  TACTS,  rATLUEES,  XSD    FEArDS. 

cent,  of  the  total  amount  of  the  advances  made  to  tliem. 
How  strictly  this  wholesome  regulation  was  adhered  to  in  refe- 
rence to  those  who  had  estahlished  it,  let  the  record  of  the 
proceedings  before  the  Commissioners  in  Bankruptcy  tell. 

Of  the  original  projectors,  the  majority  of  them  contrived  to 
provide  comfortable    and   lucrative  positions  for  themselves. 
First  there  was  Mr.  John  M'Gregor,  M.P.  for  Glasgow.     He 
was  appointed  a  director,  and,  in  consideration  of  his  great  com- 
mercial experience  and  financial  knowledge,  was  allowed  to 
draw  a  salary  in  addition  as  the  chairman  of  the  board.     Then 
there  was  IVIr.  Mullins,  the  solicitor,  whose  active  and  successful 
zeal  in  setting  the  scheme  afloat  was  rewarded  with  the  profit- 
able office  of  legal  adviser  and  secretary  to  the  board.    Again, 
there  was  the  bank  manager,  Mr.  Cameron.     What  part  this 
gentleman    took    in    originating    the    institution    does    not 
clearly  appear,  but   he  must  have  been  potently  influential 
in  some  way  or  other,  else  it  were   impossible  to  clear  up 
the  mystery  why  he  was  selected.      His  principal  qualification 
for  the   responsible   office  thrust   upon  him,   as   far  as   the 
public  can  glean,  was  in  the  locality  of  his  birth.     The  bank 
was   to   be  conducted  upon  the  Scotch  principle,  and  ]\Ir. 
Cameron  was  a  native  of  Scotland,  where  he  had  filled,   as 
far  as  appears  to  the  contrary,  with  credit  to  himself,  the  exe- 
cutive legal  office  of  SheriflT  of  Dingwall,  in  Eoss-shire,  but 
that  he  had  had  any  experience  in  bank  management,  or  in  the 
conduct  of  large  monetary  dealings,  to  entitle  him  to  a  position 
so  onerous  and  important  as  that  to  which  the  directors  of 
the  Eoyal  British   appointed  him  has  never  been  alleged. 
He  was  made  manager,  with  a  salary  of  £1500  a-year  to  begin 
with,  which  was  afterwards  increased  to  £2000  or  £2200  a-year. 
But  liberal  salaries  and  high  professional  gains  did  not  satisfy 
these  gentlemen.      They  suddenly  and  unexpectedly  found 
themselves  in  the  all  but  uncontrolled  command  of  unlimited 
funds,  and  the  temptation  to  use  them  for  their  own  private 


TACTS,    FAILUBES,  AND  PBATTDS.  273 

purposes  was  irresistible.  It  was  necessary  that  everythiug 
should  be  done  in  due  form,  and  in  a  business-like  way ;  and 
accordingly,  as  soon  as  the  bank  commenced  operations,  draw- 
ing-accounts were  opened  by  the  manager,  the  chairman,  the 
solicitor,  and  many  of  the  other  directors.  This  was,  no  doubt, 
a  very  proper  proceeding,  for  it  is  above  all  things  necessary 
that  those  who  have  the  management  of  a  bank,  and  who  invite 
public  confidence,  should  prove  that  they  have  themselves 
reliance  in  its  stability  by  trusting  their  own  mo^.ey  in  its 
custody,  but  as  the  sequel  indicates  the  principal  object  which 
these  functionaries  had  in  thus  becoming  their  own  customers 
was  to  facilitate  discounts,  or  rather  unsecured  advances  in 
their  own  favour.  At  first  sight  it  would  be  inferred  that  there 
were  practical  difficulties  in  the  working  of  the  joint-stock 
system — the  audit,  the  periodical  reports,  and  statements  of 
accounts,  and,  more  than  all,  by  the  constant  supervision  of  co- 
directors,  some  of  whom,  at  all  events,  will  be  disposed  to 
exercise  their  functions  with  a  due  regard  to  their  responsibi- 
lities. This  difficulty  the  inventive  genius  of  the  manager 
easily  surmounted.  Ho  discovered  that  the  customers  of  the 
bank  who  required  discount  accommodation  were  averse  to  that 
publicity  of  their  affiiirs  which  the  examination  of  their  bank- 
ing accounts  by  a  whole  board  involved,  and  Mr.  Cameron, 
entering  fully  into  the  spirit  of  this  objection  proposed  that  aU 
such  transactions  should  be  entered  in  a  private  ledger,  which 
should  be  accessible  only  to  himself  and  one  or  two  of  the 
directors.  The  board  adopted  the  proposition  of  their  manager, 
and  the  consequence  was,  that  he  and  the  one  or  two  members  of 
the  finance  committee  by  whom  the  secret  ledger  was  kept,  and 
who  were  no  doubt  advisedly  chosen,  helped  themselves  to  the 
contents  of  the  till  as  it  suited  them,  made  advances  to  their 
friends  without  regard  to  the  security,  and  set  the  first  seeds 
of  that  ruin  which  ultimately  resulted.  In  this  way  Mr, 
Cameron,  the  manager,  became  indebted  to  the  bank  to  the 

T 


274!  FACTS,   FAILURES,    JCsD   FBAUDS. 

amount  of  £30,000,   Mr.   M'Gregor,   £8,000,  Mr.  Mullins, 
£7000,  Mr.  Grwynne,  another  of  the  old  directors  and  origi- 
nal projectors,  £13,000,  of  Avhich  no  account  was  rendered  to 
the  shareholders,  and  of  which  it  is  extremely  problematical 
whether  the  creditors  have  recovered  one  penny.     And  one  of 
the  auditors,  who  it  may  be  presumed  was  a  little  too  prying, 
found  it  more  convenient  to  accept  an  advance  of  £2000  than 
to  enter  into  disagreeable  questionings  of  vouchers  and  cheques. 
But  still  more  remarkable  was  the  pecuniary  relations 
between  the  bank  and  some  of  its  other  directors.     Several 
of  the  original  members  of  the  board,  being  dissatisfied,  it  is 
to  be  presumed,  with  being  kept  wholly  in  the  dark  as  to 
accounts,  for  the  correctness  of  which  they  were  required  to 
take  their  share  of  responsibility,  retired ;  and  it  became  neces- 
sary to  fiU  up  the  vacancies.     Some  difficulties  were,  however, 
experienced  in  this  respect,  as  the  bank  had  not  obtained  a 
popular  repute,  and  the  changes  in  the  board  excited  distrust. 
During  this  period  of  transition,  Mr.  Esdaile  became  deputy- 
governor,  and  shortly  afterwards,  on  the  compulsory  retire- 
ment of  Mr.  C.  AValton,  who  had  obtained  large  advances, 
but  through  whom,  it  is  but  just  to  say,  it  does  not  appear 
that  the  bank  sustained  any  loss,  succeeded  to  the  high  posi- 
tion of  governor.     Mr.  Esdaile  was  not,  apparently,  a  man  of 
large  capital,  but  he  was  energetic  and  persevering,  and  he  did 
all  he  could  to  push  the  business  of  the  establishment.     The 
disastrous  investment  in  the  Cefn  Iron  Works,  however,  with 
other  mismanagement,  had  already  produced  its  effects,  and  the 
course  of  business  was  rapidly  towards  bankruptcy.     Though 
connected  early  with  the  bank,  his  personal  transactions  were 
insignificant ;  but  of  his  abilities  as  a  financier  there  is  evidence 
in  the  fact,  sworn  to  by  himself,  that  when  the  new  shares  were 
issued,  he,  having  no  funds  of  his  own,  paid  for  his  quota  by  a 
cheque  upon  the  bank  drawn  by  the  manager,  who  had  not  only 
no  balance  to  his  credit,  but,  to  the  governor's  own  knowledge, 


FACTS,   FATLrRES,   XSJi   FKAUDS.  275 

a  balance  of  several  thousands  to  his  debit.  Yet,  singularly 
enough,  Mr.  Esdaile,  in  his  examination  before  the  Commis- 
sioner, repudiated  the  idea  that  he  was  temporarily  drawing  upon 
the  bank  for  his  own  purposes.  None  of  the  directors,  how- 
ever, seem  to  have  made  so  much  from  their  connection  with 
the  institution  as  Mr.  Humphrey  Brown,  M.P.  for  Tewkesbury. 
Mr.  Brown  was  solicited  to  join  the  direction  in  the  beginning 
of  the  year  1S53,  when  numerous  secessions,  arising  from  the 
causes  before  referred  to,  had  weakened  the  board,  and  rendered 
an  infusion  of  the  M.P.  element  desirable.  The  first  thing 
to  be  done  was  to  qualify  the  intended  director  by  placing 
him  iu  possession  of  the  necessary  shares.  To  go  into  the 
market  and  purchase  them,  Mr.  Brown  found  inconvenient, 
and  Mr.  Mullins,  the  solicitor  and  secretary,  kindly  stepped 
forward  to  smooth  away  the  obstacle,  and  transferred  to  him 
the  requisite  number,  taking  his  promissory  note  for  the 
amount,  which,  it  is  almost  superfluous  to  add,  was  never  paid. 
In  the  same  way,  when  it  was  determined  to  increase  the 
qualification  of  directors,  Mr.  Brown  obtained  other  shares 
from  his  friend  Cameron,  for  which  he  gave  his  note  for 
£1000,  which  note  has,  from  that  time  to  this,  remained  a 
piece  of  waste  paper.  But  Mr.  Humphrey  Brown,  being  duly 
installed  in  the  directorial  chair,  felt  in  duty  bound  to  patronize 
•vrith  his  custom  the  institution  of  which  he  had  thus  become 
one  of  the  heads.  Accordingly,  he  opened  an  account  at 
the  bank,  paying  in  the  magnificent  sum  of  £18  14:$.,  upon 
the  faith  of  which,  and  on  the  very  same  day,  he  borrowed 
upon  his  note  of  hand  £2000.  On  the  12th  of  March  follow- 
ing, he  obtained  another  loan,  on  the  same  kind  of  security,  of 
£3000,  and  on  the  2nd  of  Itfay  a  further  loan  of  £4000,  making 
a  total  of  £9000  obtained  by  this  gentleman,  without  security, 
in  three  months.  On  the  16th  of  Juno  he  borrowed  £7000 
more,  but  his  co-directors,  thinking  it  time  that  some  security 
should  bo  given  for  these  advances,  a  mortgage  was  executed 


276  TACTS,   FAILURES,    AKD   FHATJDS. 

for  this  £7000  upon  a  vessel  belonging  to  him.  Upon  another 
ship  £5000  was  advanced,  and  so  he  went  on  upon  the  strength 
of  this  drawing-account,  begun  with  the  £18  14s.,  and  only 
replenislied  by  money  drawn  from  one  bank  drawer  and  paid 
into  the  other,  until  he  was  a  debtor  to  the  company  to  the 
amount  of  £70,000.  !N"othing  can  be  more  naive  than  the  testi- 
mony of  Mr.  Brown  in  the  Court  of  Bankruptcy.  He  says, 
*'  when  I  joined  the  bank,  I  found  the  solicitor,  the  governor, 
and  others  making  use  of  their  power  to  go  to  the  bank  counter, 
and  discount  their  paper;"  and  though  he  says  he  complained 
of  the  irregularity,  he  did  not  allow  many  hours  to  elapse 
before  he  followed  the  example.  "  But,"  he  says,  "  I  obtained 
my  advances  through  the  general  manager;"  and  he  takes 
credit  to  himself  for  having  been  the  means  of  establishing  a 
a  rule  that  all  advances  to  directors  should  come  from  that 
source.  But  after  all,  if  Mr.  Paddison  (Mr.  Mullius's  pai'tner 
and  successor  in  the  joint  ofl&ces  of  secretary  and  solicitor  of 
the  board)  is  to  be  believed,  and  there  is  no  reason  to  dispute 
his  statement,  Mr.  Brown  seems  to  have  had,  of  all  the  directors, 
the  most  accurate  sense  of  the  duty  he  owed  to  the  shareholders 
and  the  public.  It  is  stated  in  evidence,  that  over  and  over 
again,  after  he  joined  the  direction,  he  urged  upon  the  other 
members  of  the  board  that  their  losses  having  brought  them 
within  the  operation  of  the  71st  clause  of  the  Act  of  Parlia- 
ment, which  provides,  that  when  the  reserve  fund  is  exhausted, 
and  one-fourth  of  the  capital  gone,  the  concern  shaU  be  wound 
up,  they  were  bound  to  call  the  shareholders,  and  close  their 
doors.  This  he  did  more  especially  in  1855,  when  it  was  pro- 
posed to  increase  the  capital  by  the  issue  of  a  new  series  of 
shares,  but  he  was  over-ruled  by  Mr.  Esdaile  the  governor. 

An  establishment  conducted  with  such  an  utter  disregard 
of  business  principle,  could  not  possibly,  however  excellent  the 
system  upon  which  it  was  professedly  founded,  possess  the 
elements  of  permanence.     Falsified  accounts,  favourable  re- 


FACTS,    FAILUEES,   XJsD   FRVUDS.  277 

ports  and  regular  dividends,  were  not  sufficient  to  keep  the 
truth  from  gradually  oozing  that  the  bank  was  actually  in  a 
state  of  hopeless  insolvency.  The  reckless  advances  the  direc- 
tors made  to  their  friends  were  kept  sufficiently  secret  by 
means  of  the  private  ledger ;  but  the  fact  that  the  board  had, 
in  the  hope  of  recovering  large  sums,  advanced  upon  inadequate 
security,  to  the  original  lessees  of  the  Cefn  Iron  Works,  sub- 
sequently adopted  the  business,  and  were  sinking  in  them  the 
money  of  their  customers  to  the  amount  of  several  thousands 
a-week,  became  patent  to  the  world.  The  new  shares,  though 
puffed  by  all  means  and  pressed  upon  the  customers  and  the 
public,  were  not  taken  up.  The  letter  of  John  Sadleir  to  his 
brother,  published  after  the  suicide  of  the  former,  in  which 
that  consummate  swindler  advised  the  cooking  of  the  Tipperary 
Bank  accounts  as  the  accounts  of  certain  banks  in  London  were 
cooked,  specially  referred  to  the  Eoyal  British ;  and,  where 
City  gossips  congregate,  it  was  rumoured  that  those  who  had 
heavy  balances  at  the  South  Sea  House — for  the  comparatively 
humble  establishment  in  Tokcnhouse  Yard  had  now  given 
place  to  the  extensive  and  handsome  buildings  in  Threadneedle 
Street,  which  the  once  celebrated  South  Sea  Company  so  many 
years  occupied — or  at  the  branches,  had  better  reduce  them. 
A  run  in  consequence  took  place — not  general,  but  gradual 
and  continuous — which  the  suggestion  in  the  report  of  June, 
185G,  that  the  apparent  falling  off  in  the  amount  of  deposits 
arose  from  a  change  in  the  mode  of  making  out  the  accounts, 
failed  to  conceal ;  and  on  the  3rd  of  September,  185G,  the 
doors  of  the  Eoyal  British  Bank  finally  closed ;  the  institution, 
during  its  brief  existence  of  six  and  a-half  years,  having  ex- 
hausted the  whole  of  the  £158,000  subscribed  by  its  unfor- 
tunate shareholders,  leaving  them  besides  some  £500,000  in 
debt,  in  addition  to  the  heavy  expenses  of  working  the  com- 
mission in  bankruptcy,  and  the  costs  of  proceedings  under  the 
"Winding-up  Act  and  in  the  law  courta. 


278  FACTS,  FAILURES,   A>'D   rEAUDS. 

In  calmly  reviewing  the  circumstances  connected  witli  the 
disastrous  failure  of  the  E.oyal  British  Bank,  more  than  one 
question  must  be  taken  into  consideration.  ]^ot  only  was  the 
establishment  in  its  incipient  formation  irregular,  but  its 
course  of  management  most  widely  digressed  from  the  prudent 
path  of  banking  business  shortly  after  it  commenced  opera- 
tions. It  is  questioned  whether,  if  a  thorough  analysis  of 
the  accounts  were  entered  into,  the  transactions  of  the  first 
half-year  would  be  found  to  have  been  satisfactorily  arranged ; 
the  subsequent  advances  to  directors,  and  then  the  fatal  loss 
and  investment  in  the  Cefn  property,  amply  explaining  the 
cause  of  the  ultimate  suspension.  "With  a  board  of  directors 
thus  constituted,  the  leading  members  borrowers,  the  manager 
increasing  his  debt,  the  joint  solicitor  and  secretary  obtaining 
advances,  and  even  one  of  the  auditors  stultifying  his  official 
position  by  receiving  assistance  at  the  hands  of  the  bank,  safe 
and  cautious  proceedings  were  not  to  be  anticipated;  but 
though  before  the  failure  it  was  anticipated  that  some  transac- 
tions of  the  kind  would  be  revealed,  such  extensive,  if  not  frau- 
dulent, mismanagement  was  scarcely  looked  for.  .When  the 
suspension  occurred,  and  when  the  actual  facts  of  the  case  came 
to  be  disclosed,  then  no  reservation  was  made  of  the  condemna- 
tion of  the  board,  and  from  Mr.  J,  M'Gregor,  M.P.,  to  Mr. 
Cochran,  the  only  member  of  the  direction  who,  although  his  debt 
was  £14,000,  by  distant  flight,  escaped  the  perilous  ordeal  of  an 
examination  in  bankruptcy,  or  a  trial  before  a  jury,  each  re- 
ceived their  fiiir  share  of  contumely  and  reproach ;  and  admit- 
ting that  some  were  less  liable  to  censure  than  others,  the 
conduct  of  the  majority  could  not  be  palliated. 

Of  course,  different  opinions  are  entertained  of  the  struggle 
that  took  place  between  the  Courts  of  Chancery  and  Bank- 
ruptcy for  the  possession  of  the  carcase  of  the  moribund  bank. 
The  vultures  of  the  law  scented  out  the  various  systems  of 
process  by  which  the    unfortunate    shareholders     could    be 


FACTS,   FAILUBES,    AITD    FKAUDS.  279 

harassed,  and  these  actions,  arrests,  etc.,  associated  with  the  legal 
proceedings  absolutely  requisite,  made  "  confusion  worse  con- 
founded." The  ofHcial  manager  in  Chancery,  and  the  as- 
signees in  Bankruptcy,  both  strenuously  exerted  themselves  for 
their  respective  interests;  but  as  unfortunately  costs  were 
increased,  shareholders,  who  were  also  depositors,  not  only 
lost  that  which  they  had  invested,  as  well  as  the  money  lodged 
in  the  bank,  but,  as  a  dernier  resort,  were  compelled  to  avail 
themselves  of  the  privileges  of  the  statute  as  administered  in 
Basinghall  Street,  to  relieve  themselves  from  the  responsibility 
of  their  situation.*  The  trial  and  conviction  of  the  whole  of  the 
parties  wh*  were  arraigned  (death  having  previously  released 
Mr.  M'Gregor,  M.P.,  from  the  obloquy  which  attached  to  the 
bankruptcy  and  the  trial),  vindicated  the  majesty  of  the  law 
but  did  not  in  the  least  assist  to  reimbuj^e  the  ruined  share- 
holders, or  make  up  20*.  in  the  pound  to  the  unfortunate  de- 
positors. The  maximum  sentence  was  one  year,  and  the 
minimum  three  months  ;  and  although  nearly  the  whole  of  the 
defendants  have  since,  through  petitions,  etc.,  escaped  the 
full  measure  of  punishment,  the  effect  of  the  inquiry  is  still 
apparent  among  the  financial  and  trading  community. 

•  "So  one  who  has  watched  for  the  last  ten  or  twelve  years  the  progress 
of  proceedings  in  bankruptcy,  can  have  failed  to  have  noticed  who  ai-o  the 
great  legal  luminaries  of  the  court,  viz.,  Lawrance  and  Linklater,  or  Link- 
later  and  Lawrance,  as  the  case  may  be.  Great  credit  attaches  to  Mr. 
Linklater  for  the  manner  in  which  he  conducted  the  examination  of  the 
directors  of  the  Eojal  British  Bank,  after  their  surrender ;  and  though  thoy 
were  extremely  protracted,  they  were  pregnant  with  interesting  details. 
When  the  bankruptcies  became  frequent,  and  the  failures  were  attributed 
to  the  bank,  Mr.  Lawrance  one  day  facetiously  remarked,  "  Former  bank- 
ruptcies were  all  through  tho  Crimean  war,  they  ore  now  traceable  to  the 
Eoyal  British  Bank." 


280  TACTS,    FAILURES,    AND    FEATTDS. 


THE  TEIAL  OP  THE  DIRECTOES  OF  THE  EOYAL 
BEITISH  BANK. 

It  having  been  determined  upon  by  the  then  Attorney-General  (Sir  E. 
Bethell)  that  the  Directors  of  the  Eoyal  British  Bank  should  be  proceeded 
against  criminally,  the  case,  after  very  long  preparation,  became  ripe  for 
trial,  and  was  fixed  for  hearing  before  Lord  Chief  Justice  Campbell  and  a 
special  jury,  in  the  Court  of  Queen's  Bench,  Guildhall,  City,  on  Saturday, 
Eebruary  13,  1858,  and  was  not  brought  to  a  close  till  Saturday,  February 
27th,  having  occupied  the  court  thirteen  days.  Subjoined  is,  of  course, 
only  a  condensed  report  of  the  proceedings. 

The  following  gentlemen  were  sworn  on  the  jury : — Mr.  John  Lowe, 
St.  Swithin's  Lane,  foreman;  Mr.  William Dimsdale  Child,  Finsbury  Place 
South ;  Mr.  Jonathan  Chapman,  New  Broad  Street ;  Mr.  Thomas  Paget 
TTpper  Thames  Street ;  Mr.  Henry  William  Eipley,  Mincing  Lane ;  Mr. 
William  Nesbitt,  Upper  Thames  Street ;  Mr.  Augustus  Toulmin,  Great 
St.  Helen's  ;  Mr.  Beaumont  Hankey,  Mincing  Lane ;  Mr.  Henry  Augustus 
Bevan,  John  Street,  America  Square ;  James  Bowyer  Harman,  Bucklers- 
bury  ;  Mr.  William  Medland,  Brickhill  Lane ;  and  George  Hamilton 
Jenney,  Lime  Street — all  merchants. 

The  first  information  taken  charged  Humphrey  Brown,  Edward  Esdaile, 
Henry  Dunning  Macleod,  Loran  de  Wolfe  Cochran,  Eichard  Hartley  Ken- 
nedy, WUliam  Daniel  Owen,  John  Stapleton,  and  Hugh  Lines  Cameron 
with  a  conspiracy  to  defraud. 

The  counsel  on  the  part  of  the  Crown  were  Sir  F.  Thesiger,  Mr.  Ather- 
ton,  Q.C.,  Mr.  Serjeant  Ballantine,  Mr.  Welsby,  and  Mr.  Joseph  Brown; 
Mr.  Hundlestone,  Q.C,  Mr.  Kennedy  and  Mr.  Bell  appeared  for  Brown; 
Mr.  Edwin  James,  Q.C,  and  Mr.  Aspland  appeared  for  Esdaile ;  Mr. 
Lawrence  for  Macleod ;  Cochran  did  not  appear ;  Mr.  Serjeant  Shee,  Mr. 
D.  Keane,  and  Mr.  Jacobs  appeared  for  Kennedy ;  Mr.  Slade,  Q.C,  and 
Mr.  Kingdon  for  Owen ;  Sir  F.  Kelly,  Mr.  Bovill,  Q.C,  and  Mr.  Coleridge 
for  Stapleton ;  and  Mr.  Digby  Seymour  and  Mr.  Bennett  for  Cameron. 

The  first  count  charged  a  conspiracy  to  publish  and  represent  to  such 
of  the  shareholders  as  were  ignorant,  etc.,  that  the  bank  and  its  affairs  had 
been,  during  the  half-year  ended  the  31st  of  December,  1855,  and  then 
were,  in  a  sound  and  prosperous  condition,  producing  profits  divisible, 
etc.,  the  defendants  well  knowing  the  contrary,  etc.,  with  intent  to  deceive 
and  defraud  such  of  the  shareholders  as  were  not  aware  of  the  true  state  of 
its  afiairs,  and  to  induce  them  to  continue  to  hold  shares  therein,  and  to 
become,  or  continue,  customers  and  creditors  of  the  bank.  The  count  then 
set  out  the  following  overt  acts  : — 

1st.  Publishing  a  false  report  for  the  half-year  to  December  31,  1855, 
declaring  a  dividend  of  six  per  cent.,  and  that  new  shares  would  be  issued 


FACTS,   rAILUEES,    AKD   FRAUDS.  281 

at  a  premiuni.  2nd.  Issuing  new  shares,  knowing  the  bank  to  be  in  a 
failing  condition.  3rd.  Publishing  a  balance-sheet  for  the  year,  false  in  the 
amount  of  assets,  in  the  provision  for  bad  debts,  and  in  the  profit  and  loss 
account.  4th.  Paying  a  dividend  when  no  profits  were  made.  5th.  Buying 
the  bank's  shares  with  the  bank's  money,  to  keep  up  the  price.  6th.  Pub- 
lishing a  circular,  September  10,  1855,  to  the  shareholders,  to  induce  them 
to  buy  new  shares,  when  the  bank  was  in  a  failing  condition.  7th.  Pub- 
lishing an  advertisement  inviting  persons  to  open  accounts,  when  the  bank 
was  approaching  insolvency.  8th.  Publishing  an  issue  of  2000  more 
shares,  when  the  bank  was  failing. 

The  second  count  charged  a  similar  conspiracy  against  the  customers 
and  creditors  of  the  bank,  and  contained  seven  overt  acts  similar  to  JTos.  1 
to  7  in  the  first  count. 

The  third  count  charged  a  similar  conspiracy  against  the  Queen's  sub- 
jects generally.    The  overt  acts  were  similar  to  those  in  the  first  count. 

The  fourth  count  charged  a  conspiracy  to  cheat  and  defraud  such  of 
the  shareholders  as  were  ignorant  of  the  true  state  of  the  bank,  by  inducing 
them  by  false  pretences  to  purchase  and  hold  additional  shares  in  the 
bank,  the  defendants  knowing  the  bank  to  be  in  a  bad  and  dangerous 
condition  and  approaching  insolvency,  and  that  the  shares  were  unsafe,  and 
might  be  ruinous  to  the  holders.  The  overt  acts  were  the  same  as  Nos.  1 
to  5  in  the  first  count. 

The  fifth  coimt  charged  a  similar  conspiracy  against  the  Queen's  sub- 
jects generally.  The  overt  acts  were  the  same  as  Nos.  4,  5,  and  7  in  the 
first  count. 

The  sixth  count  charged  a  general  conspiracy  to  cheat  and.  defraud 
John  Arundel,  and  several  other  persons  named,  of  their  money. 

Sir  F.  Thesigeb  then  opened  the  case  as  follows : — Gentlemen,  in 
rising  to  discharge  my  duty  on  the  part  of  the  Crown,  I  cannot  help  ex- 
pressing the  great  satisfaction  I  feel  at  the  delay  which  has  taken  place  in 
the  trial  of  this  important  case,  which  has  enabled  the  public  mind  to  calm 
down  to  a  state  proper  for  a  deliberate  inquiry.  While  the  events  were 
recent,  and  the  minds  of  the  public  were  excited,  it  would  have  been  im- 
possible to  prevent  a  hasty  condemnation,  founded  upon  prejudice;  but 
now  that  the  circumstances  have  passed  away  from  the  public  mind,  and 
other  proceedings  with  respect  to  joint-stock  banks  have  attracted  their 
share  of  public  attention,  and  the  case  of  the  British  Bank  directors  is  no 
longer  a  single  one,  you  will  be  able  to  approach  it  with  the  impartiality 
suitable  to  the  gravity  of  the  case  and  the  character  of  the  administration 
of  British  law  in  an  English  court  of  justice.  I  will  endeavour  to  confine 
myself  as  closely  as  I  can  to  the  facts  and  circumstances  under  which  the 
Attorney-General  felt  it  to  be  his  duty  to  file  the  present  information. 
Those  facts,  though  numerous,  tend  to  a  single  point ;  and  I  will  endeavour 


282  TACTS,   rAILUEES,   A^'D   TEAUDS. 

with  fairness  so  to  conduct  jou  through  them,  as  to  facilitate  your  labouxS. 
The  information  is  for  a  conspiracy — a  cbai-ge  which  is  sometimes  regarded 
as  of  a  vague  character.  It  applies  to  a  case  where  persons  combine 
together  to  do  an  unlawful  act,  or  who  combine  to  do  a  lawful  act  by  un- 
lawful means.  That  definition  will  be  sufficient  for  the  present  case,  for  it 
vrill  be  found  that  a  combination  of  persons  to  injure  an  individual,  or  the 
pnbhc,  is  ground  for  the  charge  of  conspiracy.  The  defendants  were  the 
directors  of  a  joint-stock  banking  company  which  has  obtained  an  unhappy 
notoriety,  viz.,  the  Eoyal  British  Bank.  The  bank  was  established  under 
a  charter  from  the  Crown,  on  the  I7th  of  Noyember,  1849.  It  continued 
to  carry  on  its  business  till  it  was  closed  on  the  3rd  of  September,  1856, 
when  proceedings  in  bankruptcy  were  awarded  against  the  company,  and 
its  affairs  are  now  being  wound  up  by  the  Court  of  Chancery.  Only  four 
of  the  defendants — viz.,  Esdaile,  Kennedy,  Owen,  and  Cameron — were 
among  the  original  promoters  of  the  undertaking.  A  prospectus  was  issued 
by  the  defendants  to  form  the  company,  with  a  capital  of  £500,000,  hberty 
being  reserved  to  increase  the  capital  to  £1,000,000.  The  prospectus  con- 
tained a  remarkable  passage,  viz.,  that  the  charter  should  contain  a  proviso 
for  winding  up  the  affairs  of  the  bank,  if  it  should  be  found  at  any  time 
that  the  losses  amounted  to  one-fourth  of  the  paid-up  capital.  It  stated 
that  it  was  manifest  the  depositors  could  incur  no  risk,  and  that  the  share- 
holders knew  that  their  loss  could  not  exceed  one-fourth  of  the  paid- 
up  stock,  instead  of  their  liability  being,  as  in  most  banks,  imlimited.  The 
seventy-first  clause  of  the  deed  provided,  that  if  at  any  time  the  directors 
should  find  that  the  losses  of  the  company  had  exhausted  all  the  "  reserve 
fund,"  and  also  one-fourth  of  the  capital  paid  up,  they  should  call  a  special 
general  meeting,  and  submit  a  full  statement  of  the  affairs ;  and  that  if  it 
should  be  declared  by  a  majority  of  such  meeting  that  the  losses  of  the 
company  had  exhausted  the  said  fund,  and  also  one-fourth  of  the  paid-up 
capital,  the  chairman  should  declare  the  company  to  be  dissolved,  except 
for  the  purpose  of  being  wound  up.  The  capital  proposed  was  stated  to 
be  reduced  to  £100,000,  of  which  only  £50,000  was  to  be  paid  up ;  and 
upon  that  a  charter  was  obtained,  which  unfortunately  allowed  the  bank, 
to  use  the  special  title  of  "  Eoyal  British  Bank."  Cameron  was  appointed 
general  manager,  at  a  salary  of  £1250  for  the  first  year,  £1500  for  the 
second  year,  and  £2000  for  the  tliird  to  the  seventh  year,  together  with  an 
allowance  for  house-rent,  and  an  agreement  for  a  commission  on  the  profits 
of  the  establishment.  Notwithstanding  the  reduction  in  the  amount  of 
capital,  it  appeared  persons  were  slow  in  coming  in  with  deposits.  Some 
could  not  pay ;  others  wished  their  deposits  to  be  returned ;  others  gave 
promissory  notes ;  and  so  it  was  that,  the  amount  of  capital  being  defi- 
cient, the  company  could  not  open  the  bank  in  September,  as  intended. 
An  earnest  appeal  was  then  made  to  the  public,  particularly  to  the  middle 


TACTS,  FATLUBES,  AND  FBAUSS.  288 

and  bumbler  classes,  pointing  out  to  them  the  advantages  of  tho  bank, 
stating  that  the  delay  in  commencing  business  arose  from  the  necessary 
altci-ations  to  be  made  in  the  bank  premises,  and  that  the  directors  pre- 
ferred safety  to  speed.  Out  of  the  deposits  paid  into  the  bank,  draughts 
•were  drawn  by  which  a  sum  of  £7000  was  paid  to  the  solicitors,  and  £1100 
to  the  directors  themselves,  for  their  services  down  to  the  time  of  granting 
the  charter.  The  capital  was  thus  diminished,  so  that  in  November  the 
required  capital  of  £50,000  was  deficient  by  the  sum  of  £4300.  Under 
these  circumstances,  the  directors  made  an  arrangement  with  Cameron,  tho 
manager,  by  which  he  gave  his  promissory  note  for  £4300 ;  and  having, 
bv  means  of  these  notes  and  others,  made  up  a  deficiency  of  £7402  which 
then  existed,  the  defendants,  Esdaile,  Kennedy,  and  Owen,  and  others, 
signed  a  certificate  to  the  Board  of  Trade  that  the  sum  of  £50,000  had 
been  paid  up,  and  thus  the  bank  was  opened  on  the  17th  of  November, 
1849,  with  very  great  solemnity.  At  that  time  Mr.  M'Gregor  was  the 
governor,  and  Mr.  Alderman  Kennedy  the  deputy-governor,  which  ofllce 
he  resigned  in  January,  1850,  but  he  returned  in  1854.  Owen  was  a  di- 
rector till  1854,  when  he  went  out  of  ofllce  till  1855,  when  he  was  re-elected, 
and  became  deputy-governcr.  Cameron  remained  general  manager  down 
to  a  period  beyond  that  embraced  by  the  information.  33rown  became  a 
director  in  1853,  and  continued  so  until  the  closing  of  the  bank.  Macleod 
was  a  barrister,  and  son-in-law  of  Cameron,  and  became  a  director  in 
August,  1853,  and  continued  so  till  the  end.  The  defendant  Cochran  has 
left  the  country,  and  has  not  pleaded ;  so  that  you  will  not  hare  to  pro- 
nounce an  opinion  on  his  case.  The  defendant  Stapleton  joined  iu  July, 
1855,  and  continued  down  to  the  closing  of  the  bank,  and  took  a  very 
active  part  in  its  aiTairs,  and  during  the  latter  part  he  was  deputy-governor. 
All  the  directors  were  gentlemen  of  great  intelligence  and  experience,  and 
they  were  intrusted  with  the  fuU  control  and  management  of  the  bank 
under  the  deed,  which  prescribes  their  duties  in  the  most  minute  manner. 
Bv  the  twenty-ninth  clause  of  the  charter,  the  directors  were  required  to 
sign  a  declaration  pledging  themselves  "  to  observe  strict  secrecy  on  the 
subject  of  all  transactions  of  the  company  with  theii'  customers,  and  the 
state  of  accounts  with  individuals,  and  in  all  matters  relating  thereto ;" 
and  it  was  provided,  "  that  every  such  director  should,  by  such  declaration, 
pledge  himself  not  to  reveal  or  make  known  in  any  way  whatsoever  any  of 
the  matters  or  affairs  which  might  come  to  his  knowledge  as  a  director  of 
the  company,  except  when  officially  required  so  to  do  by  tho  court  of 
directors  for  the  time  being,  or  by  any  general  or  extraordinary  meeting  of 
the  company,  or  by  a  court  of  law."  By  the  thirty-sixth  clause  it  was 
provided,  "that  tho  court  of  directors  should  cause  all  necessary  and 
proper  books  of  accounts  to  be  provided  and  kept,"  in  which  "  true,  fair, 
and  explicit  entries  should  be  made  of  all  receipts,  payments,  transactions. 


284  TACTS,   FAILTTRES,   A>'D   FRAUDS. 

and  dealings"  of  the  company,  and  of  "  all  profits  arising  therefrom,"  etc. ; 
that  once,  at  least,  in  every  month,  they  should  settle  and  adjust  and  balance 
the  said  books,  and  publish  as  the  court  should  direct  "  a  full,  true,  and 
explicit  statement  and  balance-sheet,  exhibiting  the  assets  and  liabilities  of 
the  company,  and  the  amount  and  nature  of  the  capital  and  property 
thereof,  and  the  then  fair  estimated  value  thereof,  and  the  amount  of  the 
company's  negotiable  obligations  then  in  circulation,  and  the  profits  and 
losses  of  the  company,  and  all  other  matters  and  things  requisite  for  fully, 
truly,  and  explicitly  manifesting  the  actual  state  and  position  of  the  affairs 
thereof."     By  the  forty-seventh  clause,  at  every  general  meeting  the  direc- 
tors were  "  to  exhibit  a  true  and  accurate  balance-sheet  and  report  of  the 
profits  and  accumulations  of  the  joint  stock,  or  capital,  from  the  time  of 
the  commencement  of  the  business  of  the  company,  or  the  end  of  the 
period  included  in  the  last  preceding  report,"  etc.     By  the  sixtieth  clause, 
the  directors  were  half-yearly  to  declare  a  dividend  "  out  of  the  clear  profits 
of  the  company  then  actually  accrued  and  reduced  into  possession."     By 
the  sixty-third  clause,  "  the  net  profits,  after  making  deduction  and  allow- 
ance for  bad  and  doubtful  debts,  should,  after  setting  apart  such  proportion 
of  such  profits  as  the  directors  should  think  requisite  for  forming  and 
maintaining  the  said  surplus  fund,  be  divided  among  the  proprietors,"  etc. 
By  tlie  seventy-first  clause,  it  was  provided  that  if  at  any  time  the  directors 
should  find  that  the  losses  of  the  company  had  exhausted  the  surplus 
fund,  and  also  one-fourth  part  of  the  paid-up  capital,  they  should  call  a 
special  general  meeting  of  the  proprietors,  and  submit  to  them  a  full  state- 
ment of  the  aSairs  of  the  company ;  and  if  the  majority  of  such  meeting 
should  resolve  that  the  losses  of  the  company  had  exhausted  the  said  fund, 
and  one-fourth  part  of  the  paid-up  capital,  the  chairman  should  declare  the 
company  dissolved,  except  for  the  purpose  of  being  wound  up.     The  learned 
counsel  proceeded  to  observe  that,  with  such  powers  for  the  control  of 
their  alFairs,  it  was  difllcult  for  the  governors  to  go  astray.     The  board 
meetings  were  held  weekly,  and  the  "  Finance  Committee"  met  daily,  and 
there  was  also  a  "  Past-due  Bills  Committee,"  as  well  as  other  committees 
for  special  purposes.     What,  then,  was  the  conduct  of  the  directors,  and 
how  had  they  fulfilled  their  trust  ?     The  charge  now  made  against  them 
■was,  not  that  they  engaged  in  large  and  ruinous  speculations,  and  incurred 
losses  which  by  common  prudence  might  have  been  avoided,  but  that, 
having  by  their  mismanagement  brought  the  bank  into  a  state  of  hopeless 
insolvency,  they,  by  a  series  of  frauds  and  misrepresentations,  deceived  the 
shareholders,  and  customers,  and  the  public,  and  led  them  to  believe  the 
bank  was  in  a  sound,  safe,  and  flourishing  condition;  and  so  induced  them 
to  continue  customers  and  shareholders  of  the  bank,  to  the  utter  ruin  of 
the  fortunes  of  many.     I  will,  therefore  (continued  the  learned  counsel), 
proceed  to  point  out  to  you — 1st,  what  was  the  state  into  which  the  bank 


fACTS,    FAILTJEE3,   AND   FEAUDS.  285 

was  brouglit  by  mismanagement ;  2ndly,  I  will  show  that  the  defendants 
were  aware  of  its  condition  ;  and,  Srdly,  I  will  ask  you  whether,  with  that 
knowledge,  they  did  not  make  fraudulent  misrepresentations,  and  do  frau* 
dulent  acts,  in  order  to  conceal  the  true  state  of  its  affairs ;  and  whether 
they  have  not  thus  brought  themselves  witliin  the  charge  of  conspiracy  ? 
First,  tlien,  what  was  the  state  of  the  bank  ?     It  will  be  found  that  all  tho 
hopeless  debts  which  had  been  incurred,  instead  of  being  represented  in 
their  true  light,  as  they  ought  to  have  been,  were  represented  as  assets  of 
tho  company.     It  was  the  duly  of  the  directors  to  see  tliat  the  bills  dis- 
counted should  be  those  of  solvent  persons,  and  that  loans  should  be 
advanced  only  on  sufEcient  security ;  but  it  will  be  found  that  at  an  early 
period  this  duty  was  entirely  disregarded.    The  directors  themselves  were 
allowed  to  have  large  advances  on  very  indifferent  securities.     Thus 
M'Gregor,  the  governor,  had  an  advance  of  £13,700,  the  whole  of  which, 
except  about  £700,  was  lost.    Mullins,  the  solicitor  and  first  secretary,  had 
£10,000,  and  he  died  hopelessly  insolvent,  and  not  a  fraction  had  been 
paid.     Cochran  had  £10,300,  and  of  that  £7000  had  been  lost.     The  cases 
of  Cameron  and  Brown  were  extraordinary.    Cameron's  debt  originated 
in  a  note  for  £4300,  which  he  gave  to  make  up  the  deficiency  in  tho  paid- 
up  capital.     That  note  was  discounted  by  the  bank,  and  formed  the  first 
item  in  the  account  opened  against  him.     The  amount  swelled  to  the  sum 
of  £36,000,  of  which  £33,000  had  been  wholly  lost.    The  directors  were 
not  allowed  to  purchase  shares  with  the  bank's  money,  but  they  discounted 
Cameron's  notes  to  the  extent  of  £10,600,  to   enable  him  to  purchase 
shares.     In  February,  1855,  Cameron  was  taken  ill,  and  Esdailo  took  his 
place.    At  that  time  Cameron's  debt  amounted  to  £27,000,    The  learned 
counsel  here  minutely  detailed  the  steps  by  which  Cameron's  debt  at  length 
reached  £36,000.    As  security,  Cameron  had  mortgaged  to  the  bank  pro- 
perty at  Dingwall  worth  £6000,  but  already  mortgaged  for  £3000 ;  he  had 
assigned  two  debts,  which  were  denied,  and  certainly  were  not  due ;  he 
bad  assigned  another  debt  where  none  was  due,  and  eleven  policies  of  life 
assurance,  of  whicli  three  had  lapsed,  three  had  been  sold,  three  had  been 
assigned  to  his  son-in-law,  and  two  pledged  to  their  full  value.    The  case 
of  Humphrey  Brown  was  even  more  remarkable.     He  became  a  director 
in  February,  1833,  when  he  took  some  shares,  for  which  ho  paid  with  his 
promissory  note.     He  then  opened  an  account  by  paying  in  £18  11*.,  and 
on  that  very  day  ho  borrowed  £2000  of  the  bank.     Within  three  mouths, 
he  had  borrowed  other  sums  of  £3000  and  £4000,  making  a  total  of  £9000. 
The  learned  counsel  hero  described  all  tho  steps  by  which  Brown  purchased 
his  ships  with  money  borrowed  from  the  bank,  and  then  borrowed  more 
money  from  the  bank  on  the  security  of  the  ships,  wliich  he  had  mortgaged 
to  Walton,  tlie  governor.    Walton  had  become  liable  to  the  bank  for  tho 
turn  of  £41,000,  but  an  arrangement  was  made  by  which  Walton  should 


2S6  PACTS,   PAILTJEES,   AZ'D   FKAUDS. 

be  relieved  of  his  liability  on  his  surrendering  his  security  on  the  sliips  to 
the  bank,  and  Brown  agreeing  to  stand  in  his  place  for  better  or  for  v.orse. 
Brown  was  required  to  register  these  ships  in  the  name  of  the  bank ;  but 
instead  of  that,  he  mortgaged  two  to  the  Gloucester  Banking  Company, 
and  sold  another.  By  these  means  his  debt  amounted  to  £74,000,  upon 
which  the  ultimate  loss  was  £40,000.  In  1851,  the  Islington  Cattle  Com- 
pany had  obtained  advances,  and  a  bill  for  £8600  was  accepted  by  one 
Han'ison  and  other  directors.  Harrison  was  the  only  solvent  person,  but 
he  went  to  France,  and  the  company  authorized  a  person  named  De  Tape 
to  sue  him.  De  Tape  opened  an  account  with  the  bank,  and  obtained 
£10,000,  but,  having  failed  in  liis  suit,  he  died,  and  his  estate  could  not 
pay.  The  bill  for  £8600  however,  was  retained  by  the  bank,  and  though 
it  was  worthless,  it  regularly  figured  among  the  "  assets"  of  the  bank  until 
its  close,  as  did  also  De  Tape's  debt  of  £1143.  The  same  course  was  pur- 
sued in  reference  to  the  debt  of  Oliver,  of  Livei-pool.  The  learned  counsel 
then  gave  the  history  of  the  advances  on  the  Welsh  mines,  by  which  a  loss 
of  £120,000  had  accrued  to  the  bank  in  September,  1856.  Of  the  £112,847, 
the  amount  of  bills  held  by  the  bank  at  the  end  of  the  year  1855,  £26,501 
were  bad,  £67,372  were  doubtful,  and  only  £18,974  were  good.  The  bank 
had  begun  business  with  a  capital  of  only  £25,000 ;  it  had  made  no  profit, 
but  had  lost  more  than  £100,000  in  the  Welsh  mines,  and  from  £80,000 
to  £90,000  in  bad  or  doubtful  bills,  and  yet  the  directors  declared  divi- 
dends of  four,  fire,  and  six  per  cent,  till  the  very  last.  The  next  question, 
then,  you  will  have  to  consider  will  be,  whether  the  state  of  things  into 
which  they  had  brought  the  bank  at  the  end  of  1855  w  as  known  to  the 
defendants.  They  attended  the  meetings  of  the  Board,  of  the  Finance 
Committee,  and  of  the  Past-due  Bills  Committee.  The  learned  counsel 
here  referred  to  a  letter  written  by  Esdaile,  wherein  he  stated  that  bills  of 
"  men  of  straw"  had  been  discounted  by  the  bank,  and  to  an  action  brought 
against  the  bank  by  a  person  named  Clarke ;  though  the  action  was  with- 
out foundation,  the  company,  to  prevent  exposure,  compromised  it  by 
paying  the  sum  of  £2000,  and  £267  for  costs.  Mr.  Walton,  the  governor, 
had  become  indebted  to  the  bank  in  £60,000,  and,  being  refused  further 
assistance,  he,  on  the  11th  of  January,  wrote  such  a  letter  to  them  that  it 
was  difficult  to  exonerate  the  defendants.  It  was  addressed  to  Mr.  Came- 
ron, and  was  marked  "  Private,"  and  was  as  follows : — 

"  I  was  much  surprised  to  hear  from  my  son  that  you  refused  to  dis- 
count any  more  bills  for  us,  I  beg  to  tell  you  plainly  that  it  is  absolutely 
necessary  that  you  should  continue  to  discount  such  bills  as  we  receive 
from  persons  who  owe  us  money,  not  only  to  prevent  us  stopping  payment, 
but  for  the  safety  of  the  bank  itself,  which  must  fall  if  the  governor  and 
two  of  the  directors  fail,  with  whom  will  also  stop  six  or  seven  other  per- 
sons connected  with  the  bank.    You  are  not  acting  the  part  of  a  prudent 


JACXS,  rAILUEES,    AND   FEAUDS.  287 

man  of  basinew  in  thus  stopping  us  in  our  energetic  courao  of  graduoIlT 
liquidating  and  withdrawing  the  bills  from  the  bank,"  etc. 

The  learned  counsel  then  reviewed  the  history  of  the  bank  from  the 
IGth  of  January,  1S35,  when  it  was  resolved  that  an  account  should  be 
drawn  up  of  its  assets,  down  to  the  27th  of  March,  1855,  when  Brown 
called  the  attention  of  the  board  to  the  fact  that  they  had  incurred  losses 
to  the  extent  of  one-quarter  of  their  paid-up  capital,  and  told  them  it  was 
their  duty  to  call  a  meeting  of  the  shareholders,  and  that  if  they  carried 
on  the  bank  any  longer,  it  would  be  on  their  personal  responsibility.  At 
that  time  Brown's  debt  was  £77,000,  but  he  was  not  satisfied,  and  felt  that 
he  had  got  the  directors  in  his  power.  Alderman  Kennedy  was  present  at 
that  meeting.  It  would  bo  said  he  attended  very  little,  being  at  the  time 
sherifi"  for  London  ;  but  that  plea  would  not  avail,  for  by  a  memorandum 
dated  the  15th  of  May,  1855,  which  Alderman  Kennedy  gave  to  Cameron, 
it  would  appear  he  knew  well  the  state  of  affairs.  (Tho  learned  counsel 
here  read  a  letter  written  by  Macleod  to  Cameron  on  the  2nd  of  October, 
1855,  in  which  he  stated  that  their  balance  in  the  Bank  of  England  had 
been  reduced  from  £57,000  to  £25,000 ;  that  the  4th  was  upon  them,  and 
that  though  they  might  make  up  £25,000,  that  was  their  "last  shot.") 
Stapleton  became  a  director  on  the  31st  of  July,  1855,  but  he  was  not  active 
till  October.  He  was  a  gentleman  of  station,  a  barrister,  and  M.P. ;  and 
when  he  became  a  director  he  could  not  have  been  aware  of  the  condition 
of  the  bank.  I  don't  complain  of  him  that  he  brought  the  bank  into  that 
condition,  but  that,  having  become  acquainted  with  the  state  of  its  affairs, 
he  gave  the  authority  of  his  name  and  station  to  assist  in  deceiving  the 
public.  He  was  a  member  of  the  Finance  Committee,  before  whom,  the 
past-due  bills-book  was  brought,  and  he  was  present  when  Oliver's  estate 
was  reported  as  lutving  paid  3s.  Gd.  in  the  pound,  when  the  estate  of 
MuUins  was  reported  insolvent,  and  Brown's  account  was  reported  as 
insufficiently  secured.  The  resolution  to  realize  Brown's  securities  was 
drawn  up  by  Stapleton.  I  now  proceed  to  the  all-important  and  most 
painful  part  of  the  inquiry,  viz.,  that  which  relates  to  the  false  represen- 
tations made  irom  time  to  time  by  the  directors.  Though  the  bank  bad 
never  been  from  the  beginning  in  a  sound  state,  and  had  made  no  profit, 
the  directors  declared  dividends  out  of  capital,  or  rather  out  of  the  deposits. 
In  1855  they  issued  new  ahares,  and  published  advertisements  to  induce 
people  ito  become  purchasers.  A  person  named  Marcus,  who  wished  to 
purchase  some  shares,  was  induced  by  Esdaile's  description  of  the  flourish- 
ing  condition  of  the  bank,  in  Kennedy's  presence,  to  pay  £1000  for  twenty 
of  the  new  shares.  In  a  similar  manner  a  gentleman  named  William  Nicol 
was  induced  by  Kennedy  to  purchase  some  new  shares  at  par  on  tho  10th 
of  September,  1855.  Brunton,  a  poor  man,  removed  all  his  money  from 
a  savings  bank,  and  purchased  bharcs  on  the  assurance  that  the  British 


288  FACTS,   FAILURES,   A>-D   FEAUDS. 

was  as  safe  as  the  Bank  of  England,  and  lost  aU  as  a  necessary  consequence. 
On  the  10th  of  September,  1855,  a  circular  was  published,  offering  tlie  new 
shares  at  £5  premium ;  but  when  a  tradesman  named  Cantrill  applied,  and 
was  unwilling  to  pay  a  premium,  he  was  informed,  by  the  authority  of 
Macleod,  that  he  could  have  some  at  par,  and  twenty-eight  old  shares, 
which  were  in  the  bank,  were  sold  to  him  under  the  pretence  that  they  were 
the  property  of  a  deceased  shareholder.  The  general  meeting  on  the  1st  of 
February,  1856,  was  now  approaching.  Brown  had  given  the  directors  a 
second  warning  by  a  letter  on  the  22nd  of  December,  1855.  One  director. 
Valiant,  had  retired,  rather  than  face  the  meeting.  Esdaile  became  alarmed, 
and,  on  the  15th  of  May,  1856,  he  wrote  a  letter  to  Owen,  the  deputy- 
governor,  in  which  he  said  : — 

"  If  you  or  the  general  manager  cannot  satisfy  me  by  personal  assur- 
ances from  each  of  my  co-directors,  that  they  will  support  me  with  their 
presence  and  coimtenance,  on  our  orthcoming  annual  meeting,  I  shall 
abstain  from  entering  the  court-room  again ;  and  in  that  case  you  will,  if 
you  please,  officially  place  the  accompanying  notice  of  my  resignation  in  the 
hands  of  the  general  manager.  Our  highest  policy  is  to  present  a  solid 
front  to  the  public  ;  our  weakest  conduct  is  to  dangle  a  rope  of  sand  before 
them." 

The  postcript  ran  thus : — 

"  We  want  courage  and  coolness,  and  with  God's  blessing  our  difficulties 
will  be  surmounted." 

Sir  F.  Thesigee  then  referred  to  the  balance-sheet  laid  before  the 
general  meeting  on  the  1st  of  February,  1856.  The  balance-sheet  was  laid 
before  the  directors  by  Cameron,  and  with  it  an  explanatory  tabular  state- 
ment. In  the  "  assets  "  was  this  item : — "  By  loans  on  convertible  securi- 
ties for  short  periods,  advances  on  cash  credit  accounts,  bills  discounted^ 
etc.,  £986,272  11*.  Id."  The  tabular  statement  was  the  interpreter  of  that 
account,  and  it  showed  that  all  the  debts  of  the  bank,  good,  bad,  and  indif- 
ferent, went  to  swell  up  the  amount  of  "  assets."  There  was  the  debt  of 
the  Islington  Cattle  Company,  £8600 ;  and  De  Tape's  debt,  £1193  4s.  4d. 
There  was  the  "suspense  eccOant,"  which  was  the  receptacle  of  all  items 
which  it  was  desirable  to  conceal — such  as  purchases  of  shares,  advances 
on  Welsh  works,  costs  of  actions,  etc.  There  was  also  the  "adjusting 
interest  account,"  amounting  to  £17,769,  which  consisted  of  interest  upon 
bad  debts.  There  were  also  the  past-due  bills,  against  which,  in  the  hand- 
writing of  the  directors,  there  was  written  "bad,"  "hopeless,"  "let  him 
be  executed,"  etc.  On  the  other  side  of  the  balance-sheet  there  was  this 
item — "  Gross  balance  for  the  year  ended  31st  of  December,  1855,  after 
making  a  provision  on  account  of  bad  debts,  and  paying  interest  (£25,320 
Bff.  3rf.)  on  deposits,  promissory  notes,  and  balances,  £30,551  2s.7d."    The 


FA.CTS,   FAILUEES,   AKD   FltAUDS.  289 

bad  debts  being,  in  fact,  ten  times  tbe  amount  of  the  gross  profits,  the  direc- 
tors declared  a  dividend  of  6  per  cent.,  while,  according  to  the  charter,  they 
could  only  declare  a  dividend  out  of  profits  accrued  and  in  possession.  At 
the  meeting  at  which  that  balance-sheet  was  presented,  Esdaile  was  in  the 
chair,  and  all  the  other  defendants  were  present.  Cameron  read  the  report 
and  the  balance-sheet,  the  shareholders  following  him  with  the  reports 
which  they  had  received.  There  was  nothing  to  show  that  the  bank  had 
not  the  "  assets  "  to  the  extent  stated,  in  all  £1,178,812  9^.  8d.  The  ques- 
tioning was  therefore  mild,  and  the  remark  was  made  that  it  was  rather 
imprudent  to  offer  the  new  shares  so  low  as  at  £5  premium.  The 
evil  day  being  thus  tided  over,  the  first  thing  the  directors  did  was,  to 
advertise  in  the  newspapers,  and  to  force  the  new  shares  on  the  public. 
Kennedy  induced  a  druggist  named  Dakin  to  buy  twenty  shares  for  £1000; 
but  Dakin,  having  in  the  meantime  heard  of  the  Welsh  mines,  would  not 
accept  the  transfer,  and  insisted  on  the  bank  paying  the  money  back,  which 
they  did.  The  Joint- Stock  Journal  theu  began  to  publish  articles  on  its 
afiairs ;  but  the  directors  said  the  charges  were  false  and  malicious.  Tho 
learned  counsel  here  described  minutely  the  particulars  of  several  transac- 
tions, and  the  shifts  to  which  some  of  the  defendants,  particularly  Esdaile 
and  Cameron,  had  resorted  to  keep  up  the  credit  of  the  bank.  A  clergy- 
man named  Gosset,  who  had  purchased  twenty  shares,  threatened  that,  if 
the  directors  would  not  take  his  shares  back,  he  would  convene  a  meeting 
of  shareholders,  and  under  this  threat  they  were  repurchased  by  Sydney 
Kennedy  in  his  own  name  for  £980,  and  that  amount  went  into  the  "  sus- 
pense account."  Another  clergyman,  named  Kuston,  being  dissatisfied, 
entered  into  a  contract  for  the  sale  of  his  shares  ;  but,  unfortunately,  in  the 
meantime  he  went  to  the  bank  and  saw  Esdaile,  and  the  result  was  that  he 
went  back  and  paid  £10  to  be  off  the  bargain,  kept  his  shares,  and  was 
ruined.  Thus  the  bank  struggled  on,  till  at  last  the  evil  day  overtook  them, 
and  on  the  3rd  of  September,  1856;  the  doors  were  closed,  and  b.inkruptcy 
and  the  Court  of  Chancery  fell  upon  them.  It  was  then  found  that  their 
liabilities  were  £700,000,  and  assets  only  £300,000,  leaving  a  deficiency  of 
£400,000.  The  learned  gentleman  concluded  an  address  of  nearly  five 
hours  in  these  words  : — Gentlemen,  you  can  now  appreciate  the  truth  of 
the  balance-sheet  presented  on  the  1st  of  February,  1850,  in  which  the 
defendants  represented  their  afiairs  to  bo  in  a  most  flourishing  condition. 
Wide-spread  ruin  has  been  scattered  over  the  whole  of  the  country,  houses 
have  been  brought  to  destruction,  families  have  been  plunged  from  afiluence 
into  poverty,  the  hard  earnings  of  industry,  collected  by  long  labour,  have 
been  entirely  lost,  and  every  one  who  has  had  connection  with  this  bank 
has  had  to  rue  the  day  in  which  ho  trusted  to  the  assumed  fidehty  and 
truthfulness  of  its  directors.  In  conclusion,  I  must  beg  of  you  to  keep  the 
l>niling  marks  of  the  case  steadily  in  view  j  and  then  to  ask  yourselves,  Ist, 

V 


2C0  PACTS,    rAILTJEES,   AI^D   FEVrDS. 

"What  was  the  condition  of  the  bank  ?  2ncl,  Could  the  defendants  havo 
been  ignorant  of  it  ?  And,  3rdly,  Had  not  the  defendants,  by  false,  frau- 
dulent, and  deceitful  acts  and  contrivances,  induced  the  public  and  the 
shareholders  to  believe  that  the  institution  was  solvent,  when  in  fact  it  was 
not  so  ? 

Mr.  Paddison,  the  secretary  and  solicitor  to  the  bant,  was  the  first 
witness  called,  and  his  examination  occi:pied  several  days. 

A  printed  report  was  put  in,  which  had  been  drawn  up  by  Cameron  on 
the  29th  of  October,  1819,  and  laid  before  the  directors.  It  was  entitled, 
*'  The  Supplemental  Eeport  to  the  Court  of  Directors  of  the  Bank  on  the 
Organization  of  the  Establishment,  the  respective  Duties  of  its  Members 
and  Employes,  and  their  Remuneration,"  etc.  This  document,  which  was 
of  very  gi-eat  length,  was  read  throughout.  It  began  with  the  observation 
that  "  All  good  government  depends  on  good  laws  well  administered."  It 
then  went  on  to  say,  that  "  it  has  been  said  that  a  bad  law  well  executed  is 
better  than  a  good  law  ill.  However  this  may  be,  it  is  certain  that  the 
best  principles  are  of  little  avail  unless  they  are  practically,  intelligently, 
and  faithfully  acted  on."  It  then  proceeded  to  expound  the  principles  en 
whi(!h  the  Eoyal  British  Bank  had  been  founded,  and  briefly  to  review  its 
progress  from  its  first  conception.  It  stated  that  the  Eoyal  British  Bank 
was  founded  on  what  was  called  "  the  Scottish  system;"  but  it  observed 
that  that  was  hardly  a  correct  definition,  for  there  never  had  been  in  Scot- 
land, nor  anywhere  else,  a  bank  embracing  all  the  objects,  or  working  with 
the  same  methods  as  were  intended  by  the  Eoyal  British.  Having  de- 
scribed the  original  idea  of  the  bank,  the  report  said  it  had  no  better  title 
to  be  reckoned  Scottish  than  that  the  party  propounding  it  was  a  Scotch- 
man ;  and  that  the  propounder  of  it  knew  nothing  theoretically  or  practi- 
cally of  the  subject  he  ventured  to  handle.  The  idea  was  to  get  up  an 
"Exchange  Bank,"  working  also  cash  credits.  These  notions,  however, 
gave  place  to  others  of  apparently  a  higher  character,  viz.,  the  formation 
of  a  bank  which  should  afford  assistance  not  only  to  the  magnates  of  the 
metropolis,  but  to  the  merchants  and  manufacturers  of  Liverpool,  Bristol, 
Manchester,  etc. ;  and  at  the  same  time  to  fence  its  proprietary  with  limited 
vesponsibility.  But  the  report  said  it  was  early  suggested  "  that  the  lowest 
sum  allowed  by  law  should  be  taken  for  a  commencement,  if  power  for  its 
gradual  increase  would  be  conceded  by  Grovernment."  £500,000  was 
adopted  as  the  least  sum  that  should  be  named ;  but  experience  soon  con- 
firmed the  belief  that  this  sum  could  not  be  obtained  in  the  ordinary  way, 
"  nor  until  the  public  confidence  was  won  by  the  exposition  of  principles 
and  objects  calculated  to  benefit  the  masses  of  the  people  rather  than  to 
make  gain  for  a  small  body  of  proprietary  ;  and  by  the  sober,  steady,  and 
honest  working  out  of  those  principles,  testing  the  tree  by  its  fruit." 
Twenty  years'  experience  of  banking  in  Scotland,  and  four  or  five  years  of 


FACTS,    PAILFEES,   AND    TBArDS.  291 

varied  business  in  London,  liad  prored  that  "  an  establishment  taking  a 
middle  place  between  the  savings  and  ordinary  banks,  which  could  hold 
out  a  hand  to  the  supporters  of  each— the  right,  probably,  to  the  humble, 
and  the  left  to  the  great — was  a  desideratum  in  the  metropolis."  The 
report  then  asked,  ""SMiat  should  bo  its  principles?  This  was  the  funda- 
mental problem ! "  It  observed  tliat  the  "  real  object "  of  all  the  existing 
banks,  both  private  and  joint-stock,  was  to  "  make  gains  for  their  promo- 
ters and  shareholders."  The  savings-banks  were  devised  by  a  Scottish 
clergyman  for  the  benefit  of  the  poor,  but,  though  the  Goverimient  allowed 
them  a  higher  rate  of  interest  than  the  joint-stock  banks  did,  it  was  found 
that  the  security  was  fallacious,  and  for  the  prudence  or  honesty  of  the 
management  there  was  no  security  whatever,  for  the  noble  names  of  trus- 
tees and  managers  were  little  better  than  "  decoy  ducks."  To  meet  the 
defects  thus  pointed  out  the  Eoyal  British  Bank  was  established.  Its 
principles  and  practice  were,  it  said,  not  to  be  found  in  any  existing  bank. 
They  were  neither  exclusively  Scotch,  nor  English,  nor  confined  to  any 
one  of  the  four  classes  of  banks — public,  private,  exchange,  or  savings- 
banks.  The  leading  idea  of  the  bank  was  to  make  the  surpluses  of  the 
humble  and  middle  classes  active,  instead  of  passive ;  so  that  in  no  long 
time  they  might  help  even  the  merchant  princes,  as  well  as  the  humblest 
shopkeeper.  The  views  of  the  report  were  first  reduced  to  writing  in  the 
memorial  addressed  to  Government  for  the  privilege  of  gradually  increasing 
the  capital  from  £100,000  to  £2,000,000 ;  and  the  concession  of  that  privi- 
lege was  the  distinguishing  feature  of  the  legal  constitution  of  the  bank. 
Such  being  the  "  moral  constitution  "  of  the  bank,  it  stood  alone,  and 
ought  to  succeed ;  and  if  the  public  voice,  as  expressed  in  the  press,  and  by 
apphcations  with  a  view  to  business,  could  be  taken  as  criteria,  it  would  do 
so.  The  report  then  proceeded  at  great  length  to  explain  what  would  be 
the  practice  of  the  bank,  and  to  lay  down  the  duties  and  remuneration  of 
its  rarious  officers. 

Mr.  Richard  Paddison  was  then  examined  by  Mr.  Atheeton.  He  said 
that  before  the  year  1848  he  was  in  partnership  with  the  late  Mr.  Miillins, 
till  his  death  on  the  11th  of  December,  1853.  Mr.  Mullins  was  solioitor 
to  the  British  Bank  at  its  formation ;  and  afterwards  the  firm  acted  as 
solicitors  and  secretaries  to  tlie  bank.  He  (witness)  from  time  to  time 
attended,  and  took  minutes.  In  March,  1849,  a  memorial  was  presented 
to  the  Board  of  Trade,  praying  for  a  charter.  Witness  then  produced  the 
deed,  dated  the  2ud  of  July,  1849,  and  the  charter,  dated  the  17th  of  Sep- 
tember, 1849. 

Mr.  Gatherer,  the  share  registrar  of  the  bank,  was  here  called  to  prove 
that  the  four  defendants,  Esdaile,  Kennedy,  Owen,  and  Cameron,  executed 
the  deed  before  the  date  of  the  charter,  but  he  said  he  coald  not  do  so, 
though  he  saw  signatures  ou  the  deed  in  1819,  about  November. 


292  TACTS,    FATLrP.ES,    A>-D    rEAUDS. 

Mr.  Paddison  produced  the  petition  for  the  charter,  signed,  among 
others,  by  Kennedy,  Owen,  Cameron,  etc.,  and  stated  that  a  supplemental 
charter,  dated  the  23rd  of  February,  1855,  was  granted.  A  supplemental 
deed  was  also  prepared  and  executed  on  the  12th  of  June,  1855.  At  the 
time  the  charter  was  granted,  Esdaile,  Kennedy,  and  Owen  were  acting  as 
directors,  and  Cameron  as  general  manager.  Esdaile  continued  to  act  down 
to  the  close  of  the  bank.  Kennedy  went  out  in  January,  1850,  and  re- 
turned in  November,  1854,  and  continued  till  the  end.  Owen  went  out  in 
1854,  returned  in  February,  1855,  and  continued  till  the  20th  February, 
1856.  Cameron  continued  as  general  manager  till  the  22nd  of  July,  1856. 
Maeleod  became  a  dixector  in  August,  1853,  and  remained  till  the  end. 
Stapleton  became  a  director  on  the  31st  of  July,  1855,  and  continued  to 
the  end.  The  certificate  to  the  Board  of  Trade,  dated  the  16th  of  Novem- 
ber, 1849,  was  put  in,  signed  by  Esdaile,  Kennedy,  Owen,  and  others.  It 
stated  that  all  the  shares  had  been  subscribed  for,  that  the  deed  had  been 
executed,  and  that  half  of  the  subscribed  capital  had  been  paid  up.  Tlie 
acknowledgment  from  the  Board  of  Trade  was  also  read.  From  that  time 
they  carried  on  business  as  bankers  till  they  closed  in  September,  1856. 
The  bank  was  in  Tokenhouse  Yard,  but  afterwards  they  established  branch 
offices.  The  Strand  and  Lambeth  were  the  eai-liest,  then  Islington ;  there 
were  six  in  all ;  the  last  was  the  Holborn,  at  the  end  of  1855,  or  beginning 
of  1856.  I  attended  the  board  and  took  minutes.  As  secretary  I  kept 
minutes  of  the  court,  and  carried  out  some  of  the  orders,  and  conducted 
the  correspondence.  The  officers  were  the  general  manager,  the  accountant, 
cashier,  bill-clerk,  and  tellers  at  the  counter  in  the  pubhc  office.  The  ac- 
countant and  cashier  had  assistants.  There  was  my  own  office,  a  registrar, 
an  assistant-secretary,  and  private  secretary  to  the  manager.  There  was 
also  a  chairman,  or  governor,  and  deputy-governor,  both  of  .whom  were 
taken  from  the  directors.  The  number  of  directors  varied.  The  minimum 
number  by  the  charter  was  eight.  That  number  was  generally  kept  up. 
Auditors  were  appointed  by  the  shareholders  twice  a-year.  Mr.  Kennedy 
was  the  fest  deputy-governor.  Esdaile  was  governor  from  February,  1855. 
Owen,  also,  was  deputy-governor.  Stapleton  was  deputy-governor  from 
February,  1856,  tUl  the  close.  There  were  committees  which  sat,  and  I 
kept  minutes.  I  kept  no  minutes  of  the  discounts  of  the  finance  committee. 
A  certain  number  of  directors  met  every  day  by  rotation.  There  were  two 
directors  for  the  finance  committee.  There  was  a  weekly  meeting  of  the 
board,  which  they  called  a  court.  Greneral  meetings  took  place  half-yearly. 
One  in  February  was  called  the  yearly  meeting,  and  the  one  in  August  the 
half-yearly  meeting.  Reports  and  a  balance-sheet  were  presented  at  those 
meetings  by  the  directors.  This  prospectus  was  issued  by  the  bank  shortly 
after  the  charter  was  obtained.  (It  was  read,  and  contained  a  passage 
stating  it  was  manifest  the  depositors  could  incur  no  risk,  and  that  the 


FACTS,   FAILUBES,   AND  TBAUDS.  293 

shnreboldcn  must  see  that  tliey  could  incur  no  liability  beyond  one-fourth 
of  the  capital  paid  up,  instead  of  their  liability  being,  as  in  most  banks, 
unlimited.)  A  meeting  of  the  directors  was  held  on  the  12th  of  October 
1S19,  when  Cameron  made  a  report  of  the  deposits  in  arrear,  amounting  to 
£760.  Eight  of  the  parties  had  signed  the  deed.  On  the  19th  of  October, 
Esdaile,  Kennedy,  Owen,  Cameron,  and  others  were  present  at  a  meeting 
of  the  board,  when  it  was  resolved  that  £500  should  be  given  to  Mr. 
M'Gregor,  the  govenior,  for  his  services  in  the  formation  of  the  bank,  and 
that  £G0O  should  be  divided  among  the  directors  for  their  services.  On 
the  23rd  of  October,  a  resolution  was  passed  to  retvirn  the  sum  of  £G00  to 
the  Newcastle  subscribers.  On  the  26th  there  was  another  meeting,  at 
which  Esdaile,  Owen,  Kennedy,  and  others  were  present,  and  Cameron 
made  a  report  of  certain  instalments  due  from  a  Mr.  King.  On  the  16th 
of  November,  1849,  a  meeting  was  held,  when  it  appeared  the  capital  stock 
paid  on  1000  shares  was  £50,000,  and  £7402  was  held  in  securities,  and 
£25,300  was  in  the  bank.  Mr.  Faddison  then  read  the  minutes  of  the 
board,  and  correspondence  relating  to  the  advances  which  the  bank  made 
from  time  to  time  on  the  Welsh  mines,  viz.,  the  Cefn,  Garth,  and  Briton 
Ferry  Mines,  in  Glamorganshire,  and  on  the  Langley  Heath  Mines,  in 
Stafibrdshire,  and  Shropshire.  Tiiis  occupied  nearly  eight  hours.  The 
whole  of  the  proceedings  were  of  the  most  iminteresting  character,  but  the 
material  point  to  which  all  the  evidence  tended  was,  that  as  much  as 
£75,498  had  been  advanced  on  these  mines  by  a  banking  company  which 
had  been  induced  to  take  the  property  into  their  own  hands,  and  at  last 
found  it  unsaleable. 

The  report  of  Mr.  Clark,  who  had  taken  the  mines  for  a  short  time, 
but  who  found  it  necessary  to  give  them  up,  was  put  in  and  read.  It  stated 
that,  though  he  had  given  them  up  for  want  of  capita],  he  entertained  a 
higlicr  opinion  of  them  than  ho  did  when  he  first  entered  upon  them  ;  that 
nothing  but  capital  was  wanting  to  make  the  Cefn  mine  one  of  the  most 
prosperous  in  the  kingdom,  and  produce  from  £10,000  to  £20,000  a-year. 
He  referred  particularly  to  the  profit  which  would  result  from  the  shops, 
*•  if  Lord  Palmerston  did  not  put  them  down." 

Mr.  Faddison  was  recalled,  and  stated,  among  other  things,  that,  in 
September,  1854,  Cameron  wa?  instructed  to  visit  the  Welsh  works,  which 
he  did,  and  reported  thereon  to  the  board.  Mr.  Thompson  was  then  ap- 
pointed manager  of  the  works,  at  a  salary  of  £1000  a-year.  An  application 
was  made  to  Lows  Fatent  Copper  Company  respecting  dividends  on  some 
shares  which  the  bank  held,  but  nothing  was  realized  by  the  bank  from 
those  shares.  Several  more  reports  and  minutes  were  read  on  the  state 
and  prospects  of  the  Welsh  mines,  and  among  the  rest  a  memorandum, 
dated  the  18th  of  January,  1855,  showing  that  the  disbursements  made  on 
account  of  the  Welsh  mines  in  all  amounted  to  the  sum  of  £84,675  10*.  8d. 


294  TACTS,  PAiLruES,  ±yD  rr.AUD3. 

Thompson's  engagement  as  manager  of  the  works  ended  on  the  Isfc  of  May, 

1855,  when  the  directors  resolved  that  Mr.  Beveridge  should  see  the  de- 
fendant Brown  at  his  private  residence,  and  talk  over  the  affairs  of  the 
mines  in  an  unrestrained  manner.  From  a  letter  written  by  Brown  on  the 
8th  of  June,  1855,  it  appeared  that  he  (Brown)  and  Monro  (Cameron's 
private  secretary)  had  taken  the  management  of  the  works.  On  the  18th 
of  September,  1855,  the  directors  resolved  that  they  would  give  notice  to 
give  up  possession  of  the  Garth  mine  and  works  on  the  29th  of  September, 

1856,  which  notice  was  accordingly  given,  and  the  fact  reported  to  the 
directors.  The  witness  also  stated  that,  on  the  28th  of  November,  1855, 
he  received  a  letter  fi-om  the  solicitor  of  the  mortgagees  of  some  property 
at  Liverpool,  upon  which  the  bank  also  had  security  for  £5000  ;  and  that 
he  reported  to  Cameron  and  the  board  that  there  was  no  hope  of  obtaining 
any  part  of  the  amount  due.  On  the  4th  of  December,  1855,  Esdaile  made 
an  oral  report  on  the  "Welsh  mines  at  a  meeting  of  directors,  and  promised 
that  in  a  few  days  he  wotild  do  it  in  writing.  It  appeared  that  Mr.  Beve- 
ridge had  made  a  very  full  report  on  the  Welsh  mines,  and  also  Mr.  Strick 
of  Swansea  had  done  the  same,  from  which  it  appeared  that  he  took  a  very 
favoiu-able  view  of  the  value  of  the  works.  He  made  a  calculation  to  show 
that  they  might  produce  £16,347  a-year,  and  in  a  certain  contingency 
£22,000. 

Sir  F.  Thesi&ee  then  put  in  a  letter  written  by  Esdaile  in  reference  to 
Strick'e  report.     It  was  marked  "  Private,"  and  was  as  follows : — 

"  Eoyal  British  Bank,  Threadneedle  Street,  June  3,  1856. 
"  Dear  Sir, — We  note  your  observations  respecting  the  rival  qualifica- 
tions of  Mr.  Strick's  brother  and  Mr.  Waters  for  the  Swansea  agency.  We 
are  inclined  to  adopt  your  impression  as  to  the  superior  fitness  of  the  latter 
party  for  the  pectdiar  duties  involved  in  the  agency.  But  there  are  other 
considerations  which  seem  to  us,  under  present  circumstances,  to  render 
it  impolitic  to  disregard  the  application  of  Mr.  Thomas  Strick  on  behalf  of 
his  brother.  You  will  readily  imderstand  the  motive  referred  to,  which 
seems  to  render  it  expedient  that  we  should  at  present  put  up  with  Mr. 
Strick,  jun.'s  services.  You  are  aware  that  our  object  is  to  rid  ourselves  at 
the  first  favourable  opportunity  of  the  entire  concern.  Mr.  Thomas  Strick 
has  aided  our  object  by  certifying  to  the  full  and  minute  report  which  with 
BO  much  ability  you  have  drawn  up,  and  which  is  now  in  Mr.  Yenning's 
hands.  Mr.  Strick's  goodwill  may  still  be  of  service  to  us.  You  will  see 
the  kind  of  consideration  which  is  influencing  us  in  therefore  advising  the 
appointment  of  Mr.  Strick  in  preference,  at  present  at  all  events,  to  Mr. 
Waters.  If  we  succeed  in  transferring  the  property  to  other  hands,  the 
question  of  the  fitness  of  the  agent  will  no  longer  be  of  moment  to  us. 
Will  you,  if  you  please,  communicate  this  confidentially  to  Mr.  Stewart 


TACTS,   FA.rLUKE8,   AXD   FUAUDS.  295 

that  he  may  b«  in  possession  of  our  private  reasons.  If,  however,  you  or 
he  have  counter-reasons  to  propose,  favour  us  with  them.  Tell  Mr.  Stewart 
that  I  am  in  receipt  of  his  yesterday's  communication. 

"  I  am,  dear  Sir,  yours  obediently, 

"Edwabd  Esdails." 

Mr.  Beveridge  was  then  called.  He  said  he  had  been  appointed  inspec- 
tor of  the  "Welsh  works  under  the  deed  of  1851,  and  also  manager,  when 
the  bank  took  the  works  into  their  own  hands.  lie  prepared  reports  and 
balance-sheets,  which  he  submitted  to  the  directors.  They  were  eight  in 
Dumber,  from  January,  1852,  to  the  end  of  1855.  He  produced  the  balance- 
sheets,  and  identified  five  as  having  been  sent  by  him  to  the  directors,  but 
he  could  not  speak  to  the  last  three.  There  had  been  a  loss  upon  the 
works.  The  total  loss  he  estimated  at  £14,301,  but  in  cross-examination 
ho  stated  that  some  portion  of  this  was  due  to  outlay  for  improvements. 
The  witness  said  he  concurred  in  Strick's  report ;  and  it  appeared  from  his 
own  original  draught  that  the  witness  estimated  the  annual  produce  might 
be  made  equal  to  £26,000. 

Mr.  Paddison  was  then  examined  to  prove  the  debt  owing  to  the  bank 
by  the  Islington  Cattle  Company.  In  January,  1851,  the  latter  company 
had  applied  to  the  bank  for  a  loan  of  £6000 ;  and  the  bank  advanced  the 
money,  on  the  promissory  note  of  a  Mr.  Harrison,  and  other  parties  con- 
nected with  the  latter  company.  The  bank  directors  at  the  same  time 
returned  their  thanks  to  the  borrowers  for  giving  the  bank  the  preference. 
On  the  24th  of  March,  1851,  a  further  sum  of  £3500  was  advanced  on 
another  note  given  by  the  same  parties.  Both  these  notes  when  due  were 
dishonoured  ;  but  they  were  renewed  from  time  to  time  till  March,  1852, 
when  the  sum  of  £1000  having  been  paid,  there  was  still  a  sum  of  £8G00 
owing,  for  which  another  note  was  given.  A  good  deal  of  correspondence 
was  here  read,  from  which  it  appeared  that  the  note  in  question  had  been 
endorsed  to  one  De  Tape,  who  sued  Harrison  in  the  French  courts  upon 
the  note ;  but  in  the  result  the  French  court  held  that  De  Tape  was  not  the 
real  endorsee  of  the  note,  entitled  to  sue,  but  only  the  agent  of  the  bank. 
Judgment  was  accordingly  given  against  De  Tape,  who  soon  after  died 
insolvent,  and  owing  the  bank  £1325  7s.  lOd.,  towards  which  the  bank 
afterwards  received  £504  6*.  2d.  from  De  Tape's  estate,  leaving  a  balance 
due  from  him  of  £821  1*.  8c?.  No  money  was  recovered  on  account  of  the 
£8600  note,  which  was  relumed  to  the  bank.  The  witness  was  next  ex- 
amined in  proof  of  a  debt  owing  to  the  bank  by  Mr.  John  Gwynne,  who 
dietl  in  debt  to  the  bank  to  the  extent  of  £13,416  11*.  6d.  lie  said 
Gwynne  was  one  of  the  original  projectors  of  the  bank  in  l&tO.  On  the 
6th  of  February,  1850,  he  made  an  application  to  the  bank  for  a  cash  credit 
of  £3000.    The  request  was  acceded  to.     Qwynne's  letter  was  read,  in 


290  TACTS,    FAILUEES,   AND   TEATIDS, 

which  he  said,  "  lie  did  not  ask  the  advance  as  a  favour,  but  as  a  right." 
He  gave  his  promissory  note  for  £3000  at  three  months,  and  deposited  the 
lease  of  the  Bush  Mill  Iron-works.  The  nest  year  he  applied  for  £5000 
more,  on  the  security  of  a  bill  drawn  on  a  person  named  Anderson.  He 
obtained  the  money,  and  handed  the  bill  to  the  bank,  but  it  was  not  paid 
when  it  became  due.  The  bills  were  renewed,  and  some  securities  were 
deposited,  but  the  witness  beHeved  nothing  had  ever  been  realized  upon 
them.  Gwynne  died  after  the  failure  of  the  bank  in  1856,  and  according 
to  one  account,  the  sum  of  flljSS^  was  due,  and  according  to  another,  in 
Cameron's  handwriting,  the  debt  owing  was  £13,416  lis.  Gwynne's  debt 
had  been  from  time  to  time  before  the  directors,  and  a  letter  was  read 
addressed  to  him  by  Esdaile,  on  the  28th  of  February,  1855,  requesting  to 
know  what  steps  he  intended  to  take  respecting  it.  The  witness  was  then 
examined  in  proof  of  a  debt  owing  to  the  bank  from  Mr.  Mullins,  the 
former  solicitor  and  secretary.  It  appeared  that  Mullins  died  on  the  13tli 
of  December,  1853,  and  the  fact  being  brought  to  the  notice  of  the  direc- 
tors, they  passed  a  resolution  expressing  their  lively  recollection  of  the  zeal 
of  that  "most  earnest  and  zealous  supporter  of  the  bank."  The  witness 
stated  that  there  were  several  bQls  on  which  Mullins  was  liable,  but  there 
was  no  chance  of  any  of  them  being  paid.  He  stated  that  Mullins  had 
obtained  £1000  and  £300  from  the  bank  in  the  name  of  Mrs.  Goodrich, 
and  had  deposited  some  deeds  belonging  to  Mrs.  Goodrich  as  a  security; 
but  that,  after  Mullins's  death,  application  had  been  made  to  the  bank  for 
the  deeds,  upon  the  ground  that  Mullins  had  no  authority  either  to  borrow 
the  money,  or  to  deposit  the  deeds.  The  directors  referred  the  matter  to 
a  committee,  and,  upon  their  reporting  that  there  was  no  evidence  at  all  to 
show  that  Mullins  had  any  authority  for  what  he  had  done  with  the  deeds, 
the  committee  recommended  that  they  should  be  given  up.  The  directors 
adopted  the  report,  and  restored  the  deeds.  The  witness  said  a  claim  had 
been  made  on  Mullins's  estate,  and  he  believed  the  bank  would  get  some- 
thing, but  not  on  the  personal  securities.  The  bank  had  securities  for 
£4000,  but  all  beyond  that  amount  was  a  simple  contract.  In  reference  to 
this  part  of  the  case — 

Sir  F.  Thesigee  put  in  the  following  letter,  dated  the  18th  of  February, 
1854,  and  written  by  Esdaile  to  Cameron  : — 

"  Another  of  our  late  friend's  irregularities  has  just  come  to  my  know- 
ledge. I  was  told  by  Mr.  Greville  Fletcher,  secretary  to  the  Wandle  Com- 
pany, that  a  bill  drawn  upon  him  as  an  official  of  the  said  company  by  M., 
for  the  purpose  of  making  a  payment  due  by  the  latter  to  the  editor  of  the 
.■S««  newspaper,  and  discounted  at  our  bank,  has  just  matured,  and  that  the 
ordinary  notice  has  been  served  upon  him.  Fletcher  was  induced  to  accept 
the  bill  by  the  assurance  that  it  was  on  behalf  of  the  company.  He  has  no 
resources  to  enable  him  to  meet  the  bill,  and  had  no  idea  that  he  ran  risk 


TACTS.   FAII.UKE8,    aNU   FBAUDS.  2D7 

of  compromising  himself  personally  by  acceding  to  M.'s  request.  lie  has 
requested  me  to  lay  this  before  you,  which  I  promised  to  do,  without  mak- 
ing any  obsenafion  to  him  on  the  transaction.  I  am  at  a  loss  to  under- 
stand how  such  a  bill  could  have  been  cashed  without  the  initials  of  your- 
self or  some  member  of  a  finance  committee.  Surely  a  grave  charge  lies 
against  the  head  of  the  department  in  question.  In  the  present,  as  in 
Thompson's  case,  the  names  of  men  of  straw  have  been  discounted,  without 
any  authority  whatever." 

Mr.  Paddison  was  then  examined  to  prove  the  debt  owing  by  Hum- 
phrey Brown  to  the  bank.  He  said  that  in  February,  1853,  Brown  became 
a  director.  He  was  qualified  as  a  director  by  taking  a  transfer  of  ten  shares 
from  Cameron,  on  the  20th  of  January,  1853.  He  gave  a  promissory  note 
for  the  amount,  but  the  witness  could  not  say  whether  it  was  ever  paid. 
Brown  opened  an  account  with  the  bank  on  the  10th  of  March,  with  a 
crossed  check  for  £18  14s.  On  that  very  day  he  obtained  an  advance  of 
£2000,  and  gnve  his  note  for  it.  On  March  the  12th,  1853,  the  sum  of 
£3000  was  placed  to  his  credit,  on  the  deposit  of  convertible  securities. 
On  the  4th  of  May  a  further  sum  of  £1000  was  advanced  on  convertible 
securities,  and  a  promise  to  deposit  deeds  when  required.  £5000  was 
advanced  on  the  deposit  of  the  bill  of  sale  of  the  "  Helen  Lindsay  "  and 
"  Magdalena,"  which,  on  the  18th  of  August,  185i,  had  been  mortgaged  to 
Mr.  Walton,  the  governor  of  th«  bank,  for  £10,000.  On  the  4th  of  Sep- 
tember, 1854,  there  was  a  mortgage  to  the  bank  of  the  "  Helen  Lindsay," 
"  Magdalena,"  and  "  Hero,"  to  cover  advances  not  exceeding  £15,000. 
The  witness  prepared  Brown's  mortgage  of  the  4th  of  September,  but  he 
(Brown)  said  nothing  of  the  previous  mortgage  to  Walton  of  the  18th  of 
August.  Walton,  who  was  governor  of  the  bank,  said  I  need  not  search 
the  register,  as  he  knew  all  about  the  ships.  This  is  a  deed  of  the  4th 
of  September,  1854,  and  mortgages  five  Gloucester  ships,  the  "  Rory 
Brown,"  the  "  Young  Marquis,"  the  "  Wasp,"  the  "  Madonna,'  and  the 
"Bride,"  to  the  bank,  to  secure  advances,  each  for  £15,000.  I  applied  to 
Brown  to  get  the  ships  registered.  This  is  a  memorandum  by  which 
Brown,  reciting  that  ho  had  mortgaged  the  ships  to  the  bank,  undertook 
to  have  them  registered  in  London  on  their  return  from  their  several 
Toyages.  During  Cameron's  absence  from  the  bank  in  February,  1855,  an 
arrangement  was  made  by  Esdaile,  who  took  a  prominent  part  in  tho 
management,  by  which  the  bank  agreed  to  release  Walton  from  his  liability 
for  £44,000  on  his  assigning  tlie  ships  to  the  bank.  On  tho  15th  of  March, 
1855,  indentures  were  executed  by  which  Walton  assigned  tho  "  Helen 
Lindsay,"  the  "Magdalena,"  the  "Hero,"  the  "Hornet,"  and  "Ocean 
Wave  "  to  Brown,  and  Brown  assigned  tho  same  and  another  vessel  to  tlio 
bank.    It  appeared  that  on  July  Ist,  1855,  Brown  had  overdrawo  his 


FACTS,   FAILUKES,   AND   FEAUDS. 

account  with  the  Gloucestershire  Banking  Company  to  the  extent  of 
£10,289.  The  five  Gloucester  ships  had  not  been  registered,  and  on  the 
10th  of  August,  1855,  Brown  gave  the  Gloucester  Banking  Company  a 
mortgage  on  the  two  ships,  the  "  Eory  Brown  "  and  the  "  Bride." 

A  letter  was  here  put  in  and  read,  dated  January  11,  1854,  and  written 
by  Charles  Walton,  governor  of  the  bank,  to  H.  S.  Cameron,  the  manager. 
It  said  inter  alia : — 

"  I  was  much  surprised  to  hear  from  my  son  that  you  refused  to  dis- 
count any  more  bills  for  us.  I  beg  to  tell  you  plainly  that  it  is  absolutely 
necessary  that  you  should  continue  to  discount  such  bills  as  we  receive 
from  persons  who  owe  us  the  money,  not  only  to  prevent  us  stopping  pay- 
ment, but  for  the  safety  of  the  bank  itself,  which  must  fall  if  the  governor 
and  two  of  the  directors  fall,  with  whom  will  also  stop  six  or  seven  other 
persons  connected  with  the  bank.  You  are  not  acting  the  part  of  a  pru- 
dent man  of  business  in  thus  stopping  us  in  our  energetic  course  of 
gradually  liquidating  and  withdrawing  the  bills  from  the  bank,  which 
cannot  possibly  be  done  without  us  having  sufficient  time  to  realize  our 
assets.  Perhaps  you  are  not  aware  that  we  have  already  paid  this  month 
between  £3000  and  £4000  bills  held  by  the  bank,  and  between  this  and 
Monday  shall  pay  about  £4000  more,  thus  gradually,  but  continually, 
lessening  the  amount  of  paper  in  the  bank's  hands  (I  do  not  reckon  what 
has  been  done  for  ilr.  H.  Brown,  as  the  bank  hold  the  securities),  but  it 
must  be  a  work  of  time,  and  cannot  be  done  without  the  bank's  assistance 
in  the  way  of  discounts.  This  is  a  positive  fact,  and  if  you  will  risk  the 
safety  of  the  bank  by  refusing  to  discount,  let  me  know  at  once,  when  we 
ourselves,  Mr.  Brown,  Mr.  Cochran,  and  four  others,  must  stop  payment — 
for  what  ?  Not  for  any  anticipated  loss  to  the  bank,  but  refusal  of  assist- 
ance to  allow  us  time  to  realize.  As  far  as  we  individually  are  concerned, 
our  liabilities  are  small  and  means  ample,  but  we  have  got  to  bear  on  our 
shoulders  Mr.  H.  Brown,  Mr.  Cochran,  and  others,  until  we  can  realize 
their  property  (except  the  second),  which  you  know  is  a  dead  loss  to  us, 
but  none  to  the  bank.  We  have  to  bear  the  whole  of  his  losses ;  every 
one  else  escapes ;  all  of  which  we  can  arrange  by  having  the  necessary 
discounts,  etc.  etc." 

Mr.  Paddisou  stated  his  impression  that  Mr.  Walton's  liabiKties  to  the 
bank  (which  had  been  stated  to  amount  to  £44,000)  only  amounted  to 
£33,211,  as  shown  by  the  schedule  to  the  mortgage  deed.  A  letter,  dated 
the  26th  of  November,  1855,  and  written  by  Cameron  to  Brown,  was  here 
put  in  and  read,  from  which  it  appeared  that  at  that  date,  according  to 
Cameron's  statement,  Brown's  debt  to  the  bank  amounted  to  the  sum  of 
£77,698  7s.  2d.    The  letter  concluded  thus  :— 

"  I  shall  not  add  more  now  than  briefly  to  restate  the  requisitions  I 


TACTS,   FAILXJEES,   ASD   FKAUDS.  299 

now  ui^  upon  you,  viz.,  Ist,  to  provide  immediately  additional  security 
for  the  bank ;  2nd,  to  provide  for  the  payment  of  the  past-due  bills  and 
overdrawn  balance,  £38,162  15*.  9d. ;  and  3rd,  to  prepare  for  the  liqui- 
dation in  the  incoming  year  of  the  advances  on  C.S.  (convertible  securities), 
£31,029  18*.  llrf.  To  these  different  objects  I  beg  your  immediate  and 
most  earnest  attention." 

A  minute  of  the  directors  of  the  20th  of  Kovember,  1855,  was  read,  to 
appoint  a  committee  on  the  subject  of  "  convertible  securities."  The  com- 
mittce  was  appointed,  and  consisted  of  Esdaile,  Stapleton,  Macleod,  and 
Cameron.  When  they  met,  on  the  4th  of  December,  Cameron  read  to 
them  his  letter  to  Brown,  dated  the  26th  of  November,  above  referred  to. 
A  tabular  statement  of  Brown's  debt  was  also  produced  before  them. 

The  witness  was  here  cross-examined  as  to  the  value  of  Brown's  ships, 
and  the  expenditure  which  had  been  incurred  upon  them.  Some  questions 
were  also  asked  as  to  certain  alterations  in  pencil  which  had  been  made  in 
the  tabular  statement,  and  a  suggestion  being  made  that  Mr.  Linklater  had 
made  some  improper  alterations, 

Mr.  Linklater  was  called,  and  examined  by  Mr.  Ateeeton. — Ho  de- 
nied that  he  had  made  any  alteration.  He  had  made  certain  figures  in 
pencil  on  the  statement  in  the  Bankruptcy  Court,  when  he  was  examining 
Stapleton  upon  it ;  and  the  paper  so  marked  had  been  at  the  time  sub- 
mitted to  Stapleton,  and  his  coimsel,  Mr.  Huddleston,  The  witness  was 
cross-examined,  with  respect  to  an  error  in  the  same  or  some  other  account 
produced  at  the  same  time,  whereby  a  difference  of  £10,000  was  made  in 
the  account.  The  witness  said  it  was  an  error  which  was  apparent  on 
the  face  of  the  document  (in  the  adding  up),  and  ho  was  not  aware  of  it 
till  now. 

Mr.  Paddijon  was  recalled,  and  stated  that  a  meeting  of  the  committee, 
on  "  convertible  securities,"  was  held  on  the  I7th  of  December,  1855,  at 
which  Stapleton,  Macleod,  and  Cameron,  and  himself  were  present.  The 
following  resolutions  were  then  passed : — 

"  Whereas  H.  Brown,  Esq.,  M.P.,  is  indebted  to  the  Hoyal  British 
Bank  in  a  large  sum,  wliich  is  secured  to  the  bank  by  the  mortgage  of 
several  ships,  the  property  of  the  said  Humphrey  Brown,  their  freights, 
and  assurances  ;  and  whereas  it  appears  to  this  committee  that  the  securi- 
ties now  held  by  the  bank  for  the  sum  above  referred  to  are  insufEcieut, 
and  that  it  is  expedient  to  realize  the  same  or  the  greater  part  thereof;  and 
whereas  the  general  manager  has  informed  the  committee  that  the  said 
Humphrey  Brown  is  willing  to  give  the  bank  further  security,  namely,  a 
mortgage  over  certain  real  property,  a  transfer  or  mortgage  of  certain 
shares,  and  also  an  assignment  of  a  ship  called  'Severn  ;'  and  whereas  the 
committee  is  of  opinion  that  it  will  be  for  the  advantage  of  the  bank  and 


300  TACTS,   TAILUEES,   AND   PIIAUDS. 

of  Mr.  Erown,  that  the  said  ships  shall  be  gradually  sold : — Eesolved,  that 
the  general  manager  instruct  the  broker  of  the  bank  to  sell  the  said  ships 
as  they  come  to  port  in  the  United  Xingdom,  and  to  communicate  to  the 
Court  of  Directors  any  advantageous  offer  he  may  receiye  for  the  purchase 
of  any  of  the  said  ships  before  their  return  to  the  United  Kingdom.  Also 
that  the  general  manager  receive,  for  the  benefit  of  the  bank,  any  sums 
which  may  be  or  become  due  for  the  freights  or  assurances  of  the  said 
ships.  That  the  solicitor  prepare  the  deeds  or  other  documents  which  may 
be  necessary  to  effect  such  further  securities  as  aforesaid." 

By  direction  of  the  committee,  the  resolutions  ^vere  communicated  to 
Brown.  In  a  letter,  dated  the  21st  of  December,  written  by  Cameron  to 
Brown,  the  former  used  these  words : — 

"  You  do  not  specially  notice  the  resolutions  of  the  committee  directing 
the  gradual  realization  of  the  ships  as  they  come  into  port,  the  collection 
for  the  bank  of  the  freights,  and  I  presume,  of  course,  that  they  are  agree- 
able to  you.  I  therefore  shall  ofBcially  instruct  Messrs.  "Walton  and  Sons 
to  carry  those  resolutions  into  effect,  and  which  I  have  no  doubt  they  will 
do  as  the  bank  wish,  with  the  utmost  regard  to  make  the  most  of  the 
property  for  your  interest  as  well  as  that  of  the  bank." 

On  the  22nd  of  December,  1855,  Brown  addressed  a  very  long  letter 
to  Esdaile,  governor  of  the  bank,  which  was  read,  in  which  he  complained 
bitterly  of  the  proceedings  of  the  committee  on  "  convertible  securities." 
He  said — 

"  A  resolution  reaches  me  this  evening  of  so  very  extraordinary  a  cha- 
racter, that  it  has  determined  me  on  writing  this  letter.  It  is  no  more  or 
less  than  placing  not  only  my  property  but  my  account  out  of  my  hands. 
Insolvency  rarely  goes  so  far  as  this ;  generally  prudent  creditors  winding 
up  the  estate  under  supervision.  I  am,  therefore,  just  in  the  position  of  a 
bankrupt.  Have  you  ever  done  this  with  your  previous  friends,  the  origi- 
nators of  the  Cefn  debt — with  M'Gregor,  Mullins,  M'Eenzie,  Tate,  Coch- 
ran, Gwynne  ?  And  yet  this  extreme  course  is  pursued  with  a  customer 
■who  not  nine  months  since  assigned  securities  to  you  to  cover  £34,000  of 

your  governor's  papers The  present  state  of  the  shipping  interest 

is  very  peculiar ;  ships  are  very  low  in  value,  and  freights  are  remarkably 
high.     If  so,  why  not  realize  on  that  which  will  pay — two  freights  will  net 

more  than  the  ship  herself  would  produce  just  now I  am  quite  sure 

that  a  quiet,  steady  realization  of  the  property  will  save  £25,000.  On  the 
other  hand,  what  is  the  peril?  The  present  course  wiU  lead  to  one  frightful 
to  contemplate,  and  may  involve  the  wreck  of  every  one  connected  with 
the  bank.  We  are  all  different  in  the  management  of  this  bank  to  ordi- 
nary ones.  In  the  latter  there  are  two  errors — one  of  judgment,  and  a 
misappropriation  of  funds  j  ours  is  under  a  charter,  cu'cumscribing  certain 


TACTS,  TAILTJUES,  and  rBAUDS.  301 

circumstances,  and  if  directors  disregard  tliese  they  become  legally  liable* 
and  a  question  with  shareholders  will  not  be  limited  to  tens,  hundred*, 
thousands,  or  liarcUy  tens  of  thousands  of  pounds.  I  have  and  do  mako 
tise  of  the  word  '  Wo'  as  having  been  mixed  up  in  those  transactions, 
although  I  was  no  party  to  the  creation  of  a  loss  of  some  of  the  most 
grievous  transactions  of  the  company.  I  have  never  had  the  feeling  that 
our  bank  was  in  jeopardy  from  a  run,  looking  at  the  nature  of  the  accounts, 
and  even  deposits.  I  never  feel  any  over-anxiety  on  this.  I  was  always 
more  afraid  that  some  day  some  question  would  arise  in  some  shareholder's 
mind  as  to  some  transactions  of  some  kind  or  other,  and  that  inquiry  and 
canvass  may  lead  to  sufficient  to  ask  for  an  investigation  by  shareholders. 
These  are  the  breakers  ahead.  Now  excuse  my  saying  this — you  are  making 
these  very  breakers  as  certain  as  I  subscribe  this  letter  to  you,  etc.  .  .  ." 

Mr.  Paddison  went  on  to  state  that  he  prepared  the  minute  of  the  17th 
of  December  from  a  memorandum  drawn  up  by  Stapleton ;  and  that  on 
the  18th  of  December,  1855,  the  report  of  the  committee  was  read  to  the 
Board,  all  the  defendants  being  present  except  Kennedy.  The  witness 
stated  that  he  had  received  a  letter  from  Messrs.  Buchanan  and  Co.,  of  the 
14th  of  January,  1856,  saying  that  they  had  paid  to  Brown  the  freight  of 
one  of  the  vessels,  the  "  Hornet,"  and  that  Brown  being  at  the  bank  the 
same  day  said  he  (Brown)  had  not  received  the  freight,  and  that  it  still 
remained  to  be  received  by  the  bank ;  upon  which  Cameron,  who  was 
present,  remarked,  after  Brown  had  left,  "  How  painful  it  is  to  find  a  man 
in  Brown's  position  commit  himself  to  a  falsehood!" 

Mr.  HuDDLESTON  here  referred  to  a  letter  of  the  13th  of  October, 
1855,  by  which  he  said  it  appeared  that  £5000  of  the  freight  of  the 
"Hornet"  had  been  paid  at  the  bank,  leaving  £525  to  be  explained. 

Mr.  Lindsey  Winterbotham,  the  public  officer  of  the  Gloucestershire 
Banking  Company  at  Stroud,  was  examined,  and  said — In  1850,  Brown  had 
an  account  in  our  bank.  On  two  occasions  we  had  security  on  Brown's 
•hips,  the  "  Eory  Brown,"  the  "  Bride,"  and  the  "  Severn."  The  bank 
realized  £985  on  the  "  Bory  Brown,"  on  the  8th  of  October,  1856 ;  £1715 
on  the  "Bride,"  on  the  2nd  of  May,  1857;  £1021  18*.  on  the  "Severn," 
on  the  9th  of  February,  1856.  On  the  30th  of  December,  1851,  Brown'a 
account  was  overdrawn  £9577. — Cross-examined :  £4000  was  advanced  in 
December,  1854.  I  can't  say  the  securities  given  in  August,  1855,  were 
given  in  respect  to  that  advance.  A  previous  security  had  been  given  on 
five  vessels  to  the  bank  in  the  name  of  the  manager  (Evans),  to  which  I 
objected,  and  the  mortgage  of  August,  1855,  was  then  given  to  trustees  for 
the  bank.  Some  portions  of  the  advance,  £2600,  were  paid  into  the  British 
Bank,  but  I  cannot  say  that  they  were  in  respect  of  the  mortgage  on  the 
"Ambrosine."     From  the  year  1855,  the  value  of  ships  very  much  de- 


802  FACTS,   FAILTJEES,   AXD   FRAUDS. 

creased.  We  also  held  securities  on  Brown's  veal  property.  There  were 
eeveral  distinct  properties.  The  latest  estimate  ■was,  that  the  property 
was  worth  £17,000,  irrespective  of  the  vessels ;  but  it  reahzed  much  less. 
I  have  known  Brown  for  twenty-five  years.  He  had  been  a  carrier  in  con- 
siderable business — a  water-carrier — before  he  became  a  traffic-taker.  He 
•was  also  connected  with  the  Berkeley  Canal  Company  and  the  Midland 
Eailway,  and  was  employed  in  making  reports  for  committees  of  the  House 
of  Commons  on  traffic.  He  was  reputed  to  be  a  person  of  property  about 
the  years  1851-2-3.  He  was  member  for  Tewkesbury,  a  magistrate,  and 
twice  mayor  of  Tewkesbury. — Ke-examined:  When  the  £2600  was  paid 
to  the  British  Bank,  no  deeds  came  to  our  bank.  We  have  realized  all 
Brown's  securities,  except  a  portion ;  but,  allowing  for  the  value  of  the 
eecurities  not  realized,  there  is  still  a  balance  of  £5000  due  to  our  bank. 
His  last  occupation  was  that  of  traffic-taker,  excepting  his  silk  mills.  He 
was  unsuccessful  in  business.  Brown  had  been  twice  a  bankrupt,  in  1831 
and  1835.  Believed  he  paid  twenty  shillings  in  the  pound  to  his  private 
creditors, 

Mr.  Wymark,  examined  by  Mr.  Bbows,  said — I  am  a  ship-broker  in 
Philpot  Lane.  I  sold  the  "  Madonna "  in  September,  1855,  for  Mr. 
Brown,  and  paid  him  the  purchase  money,  £950.  I  also  sold  for  him  the 
*'  Young  Marquis,"  in  May,  1856,  for  £1706.  I  paid  that  money  to  Mr. 
Paddison  for  the  bank  (less  expenses).  I  also  sold  the  "Kory  Brown." 
The  witness  afterwards  added  that  he  sold  the  "  Ambrosine,"  on  the  2nd 
of  September,  1856,  for  £4000. 

Mr.  Eidley,  examined  by  Mr.  Serjeant  Baiiantike,  said — I  sold  the 
"  Hornet  "  on  March  5,  1857,  for  £5625 ;  the  "  Ocean  Wave  "  on  the  5th 
of  March,  1857,  for  £3575  ;  the  "Helen  Lindsay"  on  the  25th  of  June, 
1857,  for  £3200.  They  were  all  sold  by  public  auction. — Cross-examined: 
I  sold  the  "  Hornet "  for  the  assignees  of  the  bank.  It  was  advertised 
as  a  peremptory  sale,  with  the  concurrence  of  the  assignees  and  owner.  I 
never  heard  the  assignees  had  refused  £10,000  for  it.  At  the  time,  shipping 
property  was  much  depreciated.  Prom  1854)  to  1857,  the  depreciation  was 
from  35  to  40  per  cent.  The  ships  were  all  sold  at  a  fair  value.  In  1854 
the  "Hornet"  would  be  worth  £12  a  ton  for  the  India  trade.  It  was  of 
1206  tons  old  tonnage,  and  was  then  worth  about  £14,472.  The  "  Helen 
Lindsay,"  in  June,  1854,  was  sold  to  Brown  for  £14  a  ton,  and  would  re- 
quire an  outlay  of  £675  for  re-metalling  and  other  outlays  to  be  fitted  for 
the  Australian  trade.  I  sold  the  "Ambrosine"  to  Brown  in  September, 
1854,  for  £6160,  and  the  "  Ocean  Wave"  for  £16  a  ton,  which  would  be, 
on  374  tons,  £6000. — He-examined :  10  per  cent,  was  the  usual  rate  of 
depreciation  of  a  vessel. 

Mr.  Charles  Walton,  son  of  the  late  Charles  Walton,  formerly  governor 
of  the  British  Bank,  examined  by  Mr.  Aiheeton. — He  said  his  firm  sold 


FACTS,   rA-ItUnES,   AND   FBAUDS,  303 

the  "  Hero  "  for  £3500,  about  the  month  of  March,  1856.  Cross-examined 
by  Mr.  James  :  It  was  sold  by  the  bank's  orders,  at  Aberdeen.  The  wit- 
ness agreed  with  Mr.  Bidley  that  a  depreciation  in  the  value  of  ships  had 
taken  place  to  the  extent  of  from  35  to  40  per  cent.  The  witness  here 
stated  that  all  the  liabilities  of  his  late  father  to  the  British  Bank  liad  been 
liquidated.  He  was  afterwards  recalled,  and  stated  that  the  "  Magdalena," 
which  was  fully  insured,  had  been  condemned,  and  that  the  bank  held  the 
policy,  but  that  the  underwriters  demurred  to  pay. 

Mr.  Faddison  was  recalled,  and,  in  answer  to  questions  from  Sir  F. 
Kelly,  said,  that  before  the  month  of  August,  185G,  it  did  not  come  to  the 
knowledge  of  the  directors  of  the  British  Bank  that  the  five  Gloucester 
ships  had  been  mortgaged  to  other  parties.  Brown  had  always  told  the 
directors  that  they  were  out  on  voyages,  and  that,  on  their  return,  they 
should  be  registered  for  the  bank. 

Mr.  Serjeant  Ballaktixe  then  examined  Mr.  Paddison  in  reference  to 
the  debt  owing  by  Mr.  Oliver,  of  Liverpool,  to  the  bank.  The  witness 
could  not  prove  it. 

Mr.  Anderson,  the  bill-clerk,  was  then  called,  and  produced  £23,000 
worth  of  Oliver's  bills,  which  had  been  discounted  by  the  bank.  Craufurd 
took  the  bills  to  Liverpool,  and  on  his  return  they  were  missed,  but  after- 
wards found.  On  the  13th  of  December,  1855,  the  witness  produced  to 
the  directors  ten  bills  now  produced,  and  Oliver's  discount  pass-book. 
Cross-examined :  The  bills  are  from  November  7th,  1854,  to  the  24th  of 
April,  1855.  The  whole  amount  was  due  in  the  first  half-year  of  1855,  and 
anything  that  was  done  after  that  was  in  part  payment.  Some  payments 
were  made  in  1855  and  1856.  There  was  a  deed  executed,  by  which  Oliver 
conveyed  all  liis  estate  to  trustees,  to  pay  his  creditors  as  far  as  the  estate 
would  go.  At  the  time,  Oliver  was  reputed  to  bo  one  of  the  largest  ship- 
owners at  Liverpool.     He  failed  for  nearly  £1,000,000  or  more. 

Mr.  Craufurd,  the  accountant  of  the  bank,  and  who  succeeded  Cameron 
85  manager,  was  then  examined,  and  stated  that  he  took  Oliver's  bills  to 
Liverpool  to  receive  a  dividend.  lie  received  a  dividend  of  2*.  6d.  on 
£24,000,  and  signed  a  memorandum  in  the  accountant's  office.  The  next 
morning,  he  believed,  he  told  Cameron  that  another  dividend  of  2*.  or 
2«.  Gd.  was  anticipated.  Ho  also  calculated  how  much  could  be  recovered 
from  the  other  parties  to  the  bills,  and  showed  the  calculation  to  Cameron. 
Cross-examined :  The  debt  was  afterwards  reduced  from  £24,000  to 
£13,000  at  the  time  of  the  stoppage  of  the  bank.  A  further  dividend  of 
2*.  had  been  received,  making  in  all  4«.  Gd.  received  from  Oliver's  estate, 
beside  what  was  obtained  from  other  parties  to  the  bills.  Cameron  always 
said  that  Walton,  formerly  governor  of  the  bank,  was  morally  responsible 
for  Oliver's  bills,  as  all  the  discounts  had  been  obtained  through  him.  Be* 
examined  :  Walton's  name  was  not  on  the  bills. 


304  TACTS,  FAILURES,  XSH   FEAUDS. 

Mr.  Paddison  recalled,  and  proved  the  amounts  which  had  been  ob- 
tained from  other  persons  ^vho  were  liable  on  Oliver's  bills.  They  were  all 
insolvent,  and  had  paid  compositions  of  2s.  Gd.,  As.,  and  4*.  Gd.  in  the 
pound,  and  in  some  cases  there  was  still  a  possibility  of  something  more. 
Some  of  the  parties  vrere  stated  to  have  been  in  good  repute  for  many  years. 
The  witness  then  read  the  minutes  of  the  court  in  1850,  appointing  a  past- 
due  bills  committee,  and  also  a  minute  of  the  13th  of  February,  1855,  appoint- 
ing Esdaile,  Macleod,  and  Valiant  to  form  that  committee  for  the  year  1855. 

Mr.  Anderson  was  recalled,  and,  in  answer  to  questions,  said  that  in 
June,  1855,  Oliver's  debt  was  £17,000,  and  was  reduced  between  tliat  time 
and  the  stoppage,  and  that  Cameron  had  always  expressed  an  opinion  that 
the  bank  would  not  lose  by  the  transactions  with  Oliver.  In  November, 
1855,  Oliver's  debt  had  been  reduced  to  £14,640.  Did  not  recollect  that 
Brown  complained  of  Oliver  being  accommodated,  on  the  ground  that  he 
was  not  a  customer. 

Mr.  Paddison  recalled,  and  produced  a  letter,  dated  the  25th  of  Febru- 
ary, 1850,  from  Mr.  John  M'Gregor,  who  was  at  that  time  governor  of 
the  bank,  asking  for  an  advance  on  the  security  of  his  promissory  note. 
The  demand  was  on  the  26th  of  February  brought  before  the  Finance 
Committee,  and  agreed  to.  This  promissory  note  for  £1000  at  three 
months  was  discounted.  A  further  advance  was  made  on  the  26th  of  Sep- 
tember, and  on  the  27th  of  November,  1851,  his  promissory  note  for  £2000 
at  six  months  was  discounted.  A  memorandum  was  afterwards  given  by 
Mr.  M'Gregor  to  the  bank,  along  with  the  deposit  of  certain  securities. 
A  list  of  these  securities  was  produced  and  read  as  follows :  — "  Stock 
transfer  receipts  for  £4677  11*.  Gd. ;  a  policy,  dated  August  15,  1843,  for 
£1000,  in  the  Law  Life  Assurance  Society,  on  the  life  of  J.  M'Gregor  ;  a 
policy,  dated  June  14, 1851,  for  £1000,  in  the  Merchant's  and  Tradesman's 
Assurance  Society,  on  the  life  of  J.  M'Gregor  ;  10  shares  of  £100  each  in 
the  Eastern  Archipelago  Company  ;  certificates  of  10  shares  in  the  Clydes- 
dale Bank,  on  which  £130  had  been  paid ;  5  shares  in  the  Strand  Bridge  ; 
25  shares  (£50  paid  up)  in  the  Warkworth  Dock  Company  ;  10  shares  in 
the  Royal  British  Bank  (£50  paid  up)  ;  certificates  of  50  £20  shares  in  the 
Irish  Beetroot  Sugar  Company  (£2  10s.  paid  up) ;  50  £20  shares  in  the 
Irish  Peat  Company  (£4  paid  up) ;  scrip  certificates  of  250  shares  in  the 
Chartered  Australian  Land  and  Gold  Company  (£1  paid  up)  ;  scrip  receipts 
for  50  paid-up  shares  of  £50  in  the  Royal  Australian  Bank  and  Gold 
Importing  Company ;  promissory  note  of  August  15,  1849,  by  J.  Menzies, 
for  £400,  payable  three  months  after  date,  endorsed  by  J.  M'Gregor  and 
J.  C.  Menzies,  on  which  £40  had  been  paid."  The  securities  all  remained 
in  the  bank  till  the  failure.  The  bank  has  received  nothing  on  them,  except 
on  the  policy  in  the  Law  Life  Assurance  Society.  The  £1000  was  received 
after  Mr.  M'Gregor's  death— after  the  stoppage.    A  sum  of  £800  was  also 


TACTS,   FAILITBES,   AND  FnATTDS.  305 

received  from  Jlr.  M'Gregor.  The  other  policy  dropped  for  non-payment 
of  premiums.  The  witness  here  gave  further  evidence  as  to  Mr.  M'Gregor's 
acceptances  and  their  renewals.  In  January,  1854,  the  witness  met  Mr. 
M'Gregor  and  Mr.  Cameron  at  the  bank,  when  an  account  was  produced, 
in  the  handwriting  of  the  clerk,  Craufurd,  by  which  it  appeared  that  the 
amount  at  that  time  due  from  Mr.  M'Gregor  to  the  bank  was  £7375  3*.  Id. 
It  was  examined  and  found  correct,  and  signed  "J.  M'G."  The  schedule 
of  securities  was  produced,  and  Cameron  and  M'Gregor  had  a  conversation 
as  to  their  value.  A  minute  was  made  in  the  margin  of  the  paper  at  the 
time,  and  their  value  was  stated  to  be  £5550.  [Sir  F.  Kelly  said  the 
items  had  been  wrongly  added  up ;  it  should  have  been  £6550.]  A  further 
memorandum  of  deposit  was  then  executed,  and  Mr.  M'Gregor  undertook 
to  transfer  the  stock ;  but  he  afterwards  made  difficulties,  and  a  correspond- 
ence took  place. 

Cross-examined :  In  June,  1855,  the  balance  due  was  from  £6000  to 
£7000.  Mr.  M'Gregor  retired  in  February,  1851.  The  securities  camo 
to  me,  on  Mullins's  death,  in  a  sealed  form,  and  were  kept  by  me  in  an 
iron  safe  till  the  stoppage.  They  were  always  spoken  of  by  the  directors 
as  worthless.  Esdaile  was  taking  steps  to  bring  M'Gregor  to  book.  He 
was  very  earnest  about  it,  and  did  all  in  his  power.  M'Gregor  was  in 
good  repute.  He  had  been  Secretary  to  the  Board  of  Trade,  and  was  M.P. 
for  Glasgow.  There  was  no  doubt  at  that  time  of  his  responsibility.  He 
lived  in  good  style  at  Prince's  Gate.  •  He  resigned  his  office  at  the  Board 
of  Trade.  He  gave  a  prestige  to  the  bank,  and  was  believed  to  be  a  most 
honourable  man,.  Two  bills  had  been  discounted  for  M'Gregor,  amounting 
to  £1200,  and  Esdaile  complained  that  they  had  been  discounted  surrep- 
titiously, with  Mullins's  initials,  without  going  before  the  Finance  Com- 
mittee. I  have  no  doubt  that  was  the  case.  Mullins  at  that  time  had  the 
exclusive  confidence  of  the  bank.  I  was  acquitted  of  any  complicity  in 
the  Goodrich's  affair.  On  the  6th  of  February,  1855,  a  resolution  was 
passed  by  the  court  of  directors  that  in  future  no  bills  should  be  passed 
for  discount  otherwise  than  in  due  course  by  the  Finance  Committee,  and 
that  no  director  sliould  pass  his  own  bills.  When  the  bills  in  question 
were  discounted,  M'Gregor  was  himself  governor.  It  was  suggested  to 
the  witness  that  at  that  time  directors'  bills  did  not  go  before  the  Finance 
Committee.  He  said  he  could  not  speak  as  to  that,  but  he  knew  one  in- 
stance, viz.,  where  Gwynne's  bill  for  £5000  was  brought  before  the  com- 
mittee. I  was  solicitor  to  the  Australian  Land  and  Gold  Company.  They 
have  land  in  Australia,  but  there  is  no  gold  on  it.  I  don't  know  that  they 
paid  £20,000  for  the  purchase.     The  squatters,  I  believe,  nro  on  the  land. 

Bc-examined  :  The  rest  of  the  stock  beyond  the  £800  was  not  obtained, 
because  other  parties  had  a  claim.  As  to  M'Gregor's  means,  the  witness 
said  be  lived  by  literary  labours  and  connection  with  companies.    His 

X 


306  TACTS,   rAILTTEES,   A^^>   FBAUDS. 

means  were  not  hopeful  in  January,  1856.  Mullins  died  in  February,  1853; 
his  defalcations  were  discovered  in  1854.  Tlie  resolution  about  the  dis- 
counts was  passed  on  the  6th  of  February,  1855.  I  had  heard  the  dii-ec- 
tors  make  complaints  about  Mullins's  misconduct.  I  should  say  all  the 
defendants  in  turn  were  present  at  such  meetings  from  February,  1854,  to 
February,  1855.    The  Warkworth  Dock  Company  got  £1000. 

Mr.  Anderson,  the  biU  clerk,  was  recalled,  and  proved  that  in  June, 
1855,  M'Gregor's  debt  was  £7734 ;  in  December,  1855,  £7948  10*.  lOd.  ; 
and  in  June,  1S56,  £7802  105. — Cross-examined  :  £1181  18«.  was  received 
on  the  Law  Life  policy,  and  £806  14s.  6d.  in  stock ;  total,  £1988  12*.  6d. 

Mr.  Paddison  was  then  called  and  examined  in  proof  of  Cochran's 
debt.  He  said  that,  on  the  23rd  of  December,  1854,  Cochran  obtained 
credit  for  £5000  upon  four  bonds,  with  sureties.  One  amounting  to  £2000 
had  been  paid.  In  one  of  the  others,  the  dii*ectors  had  accepted  a  com- 
position of  4*.  6d.  in  the  pound,  and  in  another  10s.  in  the  pound,  from 
the  sureties. 

Mr.  Barnard,  the  chief  cashier,  was  here  examined,  and  stated  that,  in 
the  early  part  of  1854,  Cochran's  account  was  kept  in  the  green  ledger  in 
his  room.  It  was  occasionally  sent  for  by  the  directors,  and  Esdaile  saw  it 
from  time  to  time. 

Mr.  Hugh  Thomas  Cameron,  son  of  one  of  the  defendants,  was  called, 
said — I  was  at  one  time  a  clerk  in  the  British  Bank.  This  note  (in  the 
green  ledger)  is  in  my  handwriting — "Cochran  may  overdraw  his  account 
to  the  extent  of  £5500 ;  credit  in  all,  £10,500.  By  order  of  the  governor, 
Mr.  Esdaile,  H.  T.  C.  March  6, 1855."  I  made  the  entry,  because  Esdaile 
told  me  Cochran  might  overdraw  his  account  to  that  amount.  On  a  subse- 
quent page  I  made  this  entry: — "Mr.  Cochran's  advance  in  all  to  be  £10,700. 
By  order  of  the  governor,  Mr.  Esdaile,  H.  T.  C."  This  book  was  before 
the  court  at  different  times.  I  cannot  tell  the  names  of  the  directors  who 
were  present.  The  sum  of  all  the  books  was  brought  into  the  "  money 
lodged  and  lent  book,"  which  was  before  the  directors  every  day. 

Mr.  Craufurd  said  the  account  of  Cocliran's  notes  current  and  dis- 
counted to  December,  1854,  amounted  to  £20,000.  On  the  13th  of  June, 
1855,  the  account  was  £11,400  15«.  Id. ;  and  on  the  31st  of  December, 
1855,  it  was  £9503  3s.  5d. — Cross-examined :  I  cannot  say  that  there  is 
one  word  in  the  green  ledger  in  Cameron's  handwriting.  Cochran's  bills 
altogether  might  amount  to  £600,000. 

Mr.  Anderson  was  recalled,  and  said  that  Cochran  had  £20,000  worth 
of  bills  running  at  a  time.  He  had  a  discoimt  at  the  Bank  of  England. 
They  were  principally  commercial  bills, 

Mr.  Paddison  was  next  examined  with  respect  to  Eowland  HiU  Slacker's 
debt.  He  stated  that  Blacker  kept  a  shop  on  Ludgate  Hill,  in  the  silk 
trade.     On  the  10th  of  AprU,  1855,  he  obtained  a  discount  accoxmt  to  the 


TACTS,  I'AILUBBS,   AKD   FBAUSS.  307 

extent  of  £1000,  and  deposited  a  policy  in  the  Guarantee  Society  for 
£12,000.  It  was  extended  to  £5000  on  the  15th  of  August.  On  the  18th 
of  December,  1855,  Cameron  reported  to  the  directors  that,  from  what  he 
liad  heard  from  Slacker's  wife,  the  dishonoured  bills  would  not  be  paid. 
Blacker  had  absconded.  The  sum  of  from  £3000  to  £4000  was  named  to 
the  board  as  deficient.  Forrester,  the  detective,  was  employed.  I  was 
instructed  to  look  into  his  security.  I  examined  the  policy,  which  the 
bank  hatl  taken  without  reference  to  me,  and  I  found  the  policy  was  not 
available  as  a  security  to  the  bank  for  bills  of  this  kind.  Blacker  was  made 
a  bankrupt  on  the  21st  of  December,  1855.  On  the  26th  of  December,  it 
was  reported  to  the  directors  that  Blacker  had  gone  abroad,  and  that  his 
wife  held  out  hopes  of  his  getting  some  money  through  a  court  at  Florence. 
I  told  the  directors  they  could  recover  nothing  on  the  policy.  Tliey  also 
held  the  lease  of  the  house  on  Ludgate  Hill.  It  had  been  valued,  on  the 
loth  of  December,  1854,  at  £300,  but  it  was  sold  for  less.  On  the  8th  of 
January,  1856,  the  directors  ordered  Forrester's  bill  of  £9  10s.  for  making 
inquiries  after  Blacker,  "  charged  with  defrauding  the  bank,"  to  be  paid. 
On  the  13th  of  May,  1856,  a  solicitor  attended  the  court,  and  made  an 
explanation  of  Blacker's  affairs.  His  estate  produced  4s.  6d.  in  the  poimd, 
and  I  don't  think  the  bank  got  any  further  return. — Cross-examined :  In 
February,  1856,  it  was  not  known  what  dividend  would  be  paid. 

Mr.  Craufurd  was  recalled,  and  said — Blacker's  account  commenced  on 
the  9th  of  April,  1855,  and  consisted  chiefly  of  small  bills  of  £30  and  £40. 
The  bills  were  well  paid.  Ho  did  from  £400  to  £500  a-month.  In  the 
month  of  August,  1855,  only  two  bills  were  irregular.  In  December,  1855i 
I  discovered  that  he  had  placed  fictitious  bills.  His  was  an  exceedingly 
good  account  till  then.  The  surprise  and  discovery  came  within  three  oi: 
four  days  of  one  another.  I  was  aware  of  the  deposits  of  the  guarantee 
policy  and  lease.  [The  policy  was  here  put  in.  It  guaranteed  the  assured 
against  trade  losses.]  In  December,  1855,  the  bank  held  ninety-two  bills 
of  Blacker's,  and  every  one  was  fictitious.  His  past-due  bills  were  £1146  13*,, 
when  the  discovery  was  made ;  the  others  were  running.  The  ninety- two 
bills  bear  Blacker's  signature,  and  they  were  discounted  for  him  by  the 
British  Bank.  The  total  was  £4206  12s.  Ho  also  had  a  cash  credit 
account. — Cross  examined  :  I  ascertained  the  loss  on  the  24th  of  March. 
In  December,  1855,  £1098  was  found  out. 

Mr.  Barnard,  recalled,  said — In  December  1855,  I  was  called  into 
Cameron's  room  to  examine  some  of  these  bills,  and  give  mj  opinion. 
My  impression  was,  that  the  acceptances  were,  many  of  them,  in  the  eamo 
hand,  and  I  mentioned  that  to  Cameron.  Cameron  directed  tliat  Monro  should 
write  to  Icam  about  the  acceptances.  He  did  so,  and  it  turned  out  that  no 
such  parties  coidd  be  found  or  hoard  of  as  acceptors.  That  was  about  the 
end  of  1855.    After  that,  in  about  a  week,  at  the  end  of  December,  I  was 


308  TACTS,   TAILrEES,   AXD   FEATJDS. 

called  into  the  board-room.  The  bills  were  then  spoten  of  by  the  directors 
as  fictitioiis  bills.  I  do  not  know  who,  or  how  many,  were  there.  Blacker 
owed  £400  on  a  cash  credit  account. — Cross-examined :  We  had  confidence 
in  Blacker  before,  but  this  we  could  hardly  realize.  The  green  ledger  was 
almost  always  in  my  room.  It  was  a  collection  of  the  accounts  to  which 
it  was  necessary  to  refer  often,  and  was  made  to  avoid  taking  the  books 
from  the  ledger  clerks.  The  green  ledger  was  not  in  Cameron's  hand- 
writing. As  Blacker's  bills  became  due,  they  were  put  into  the  "  past-due 
bill-book," 

The  next  proof  proceeded  with  was  Cameron's  debt  to  the  bank. 
Mr.  Paddison  was  then  examined  with  reference  to  Cameron's  debt — 
He  said  Cameron  was  taken  ill  in  1855,  and  was  absent  during  his  illness. 
Esdaile  took  his  place  mainly  in  the  management  of  the  bank,  in  consulta- 
tion with  other  dii-ectors,  Kennedy,  Spens,  Owen,  Valiant,  and  Macleod. 
They  appeared  to  be  in  the  manager's  room,  as  well  as  in  the  board-room. 
On  the  13th  of  February,  1855,  a  court  was  held,  and  a  committee  was 
appointed  to  examine  into  the  books  and  aiTairs  of  the  bank;   and  the 
rotation  was  settled  on  the  finance  committee,  and  past-due  bills  com- 
mittee.    The  latter  consisted  of  Esdaile,  Macleod,  and  Valiant,     In  Feb- 
ruary or  March,  1855,  the  directors  told  me  to  tell  Cameron  they  wished 
an  explanation  from  him  as  to  some  shares,  and  I  delivered  the  message. 
He  said  he  must  have  Monro's  assistance,  and  I  mentioned  that  to  the 
board,     Esdaile  said  he  would  write  to  Cameron,    [A  long  correspondence 
was  here  read  between  Esdaile  and  Cameron  on  the  subject  of  shares  held 
by  the  latter,  in  the  course  of  which  Cameron  expressed  himself  a  great 
loser  by  his  connection  with  the  bank,  etc.]     At  the  ead  of  the  year  1855, 
Cameron  went  to  Scotland.    Before  he  went,  he  gave  me  some  papers,  and 
wished  me  to  prepare  a  security  on  some  property  of  his  at  Dingwall.    I 
was  puzzled  with  the  papers,     Cameron  said  it  was  very  simple,  and  he 
would  lend  me  a  book  on  Scotch  conveyancing,  (Laughter.)    Monro  found 
a  book,  and  I  commenced.     I  prepared  a  draft,  and  submitted  it  to  him,  on 
his  return.     He  is  a  Scotch  lawyer.     I  was  not  spoken  to  by  the  directors 
about  the  security  till  March,  1856.     [Some  more  correspondence  was  here 
read.]     In  March,  1856,  Esdaile  and  Stapleton  had  an  interview  with  me 
as  to  Cameron's  proposed  security.     I  told  them  he  had  long  before  told 
me  to  prepare  a  security  for  not  exceeding  £15,000.     I  told  them  of  the 
difficulty,  and  that  I  could  not  get  over  it.     I  was  again  spoken  to  in  May, 
and  asked  how  matters  stood,  and  I  said  I  must  have  authority  to  employ 
a  Scotch  conveyancer.     Early  in  June,  I  chose  a  Mr.  Greig.     In  July,  I 
explained  to  Esdaile  and  Stapleton  the  nature  of  the  securities  given  by 
Cameron  in  1849  for  the  credit  of  £3000,  and  I  said  that  from  their  nature 
they  were  no  securities  at  all.     They  were  three  policies.     Tip  to  that  time 
there  was  no  security  for  Cameron's  debt  except  those  three  policies,  for 


FACTS,  PAILTTEE3,  A^TD  FBATJDS.  309 

£C00O.  I  did  not  know  of  any  debt  lio  owed  to  the  bank  except  the  £3000, 
and  what  I  might  infer  from  the  proposed  security  (not  exceeding  £15,000). 
After  February,'l855,' I  was  "always  requested  to  retire  from  the  board, 
which  I  did.  I  wish  to  call  attention  to  that  fact,  as  affecting  my  own 
character  and  the  position  in  which  I  stood.  That  was  in  Cameron's 
absence.  It  occurred  once  in  Cameron's  presence,  and  he  objected,  and 
said  there  was  no  necessity  for  me  to  leave.  I  left  the  books  behind,  and 
was  glad  to  get  away. '  I  remember  being  at  a  meeting,  at  the  latter  part  of 
June,  1856,  when  Esdaile,  Stapleton,  and  Cameron  were  present,  at  tho 
South  Sea  House.  I  remember  Stapleton,  in  a  most'determined  maimer, 
questioned  Cameron  about  his  account.  Ho  asked  what  he  had  done  with 
the  sum  of  £3000  or  £3500.  Had  he  sent  it  abroad,  or  had  he  inrested  it 
in  any  way  for  himself?  Cameron  refused  to  answer.  Stapleton  insisted 
on  having  an  answer.  Cameron  still  did  not  answer.  He  said  to  me,  in. 
an  under  tone,  "  What  shall  I  do  ?"  He  (Cameron)  seemed  agitated  and 
distressed.  I  said,  "  Think  before  you  speak,  and,  if  you  cannot  collect 
your  thoughts,  don't  speak  at  aU."  On  the  3rd  of  July,  I  applied  to 
Cameron  for  tho  particulars  of  liis  title  to  the  Dingwall  property,  the  ab- 
stract, and  Cameron  incidentally  mentioned  that  it  was  mortgaged  already 
for  £3000,  of  which  I  was  not  aware  before.  I  mentioned  that  to  Esdaile 
and  Stapleton,  and  they  said  they  were  aware  of  it.  [A  memorandum  in 
Stapleton's  handwriting  of  Cameron's  accoimt,  amounting  to  £24,903,  was 
liere  referred  to,  and  there  was  also  a  correspondence  read  respecting  some 
shares  in  the  bank  which  Cameron  held.]  The  witness  proceeded  to  state 
that  a  mortgage  was  executed  by  Cameron  of  the  property  at  Dingwall,  and 
also  that  as  many  as  eleven  life  pohcies  and  some  debts  were  assigned  to 
the  bank.  The  property  at  Dingwall  was  valued  at  £10,000,  and  instruc- 
tions were  given  to  realize  it. 

Mr.  Anderson,  the  bill- clerk,  was  then  recalled,  and  said— When  I 
entered  the  office,  in  April,  1853, 1  found  promissory  notes  of  Cameron's 
to  the  amoimt  of  £9600.  They  at  that  time  stood  to  Cameron's  debit,  in 
his  discount  account,  in  the  discoimt  ledger.  I  entered  tho  particulars  of 
the  notes  at  the  end  of  my  diary.  They  were  continued  on  as  current 
obligations  from  one  six  months  to  another.  Tho  same  entry  was  made 
yearly,  till  the  end  of  the  bank.  There  were  also  two  bills  drawn  by 
Cameron  on  Finlayson — one  dated  the  28th  of  October,  1852,  at  "  five 
days  after  demand ;"  and  the  other  for  £1500,  dated  tho  7th  of  February, 
1853,  "payable  six  months  after  demand."  They  all  formed  part  of 
Cameron's  discount  account.  Those  bills  were  continued  down  to  tlie  close 
of  the  bank.  Interest  was  charged  upon  them,  at  five  per  cent,  on  each 
continuance.  There  was  also  a  joint  note  by  Cameron  and  Owen,  for 
£4-16  9*.  3d.,  dated  the  19th  of  October,  1852,  payable  six  months  after 
date.    That  also  was  continued  ciurcnt  down  to  the  close  of  the  bank. 


310  TACTS,  FAILUEES,   AND  TEAUDS. 

There  was  another  note  for  £19S  4s.  4-d.,  -which  was  also  continued,  of 
which  £100  OS.  3d.  remained  unpaid.  JTone  of  these  went  iato  the  "  past- 
due  bOls "  book.  There  was  also  a  note  of  the  18th  of  July,  1853,  for 
£1000,  payable  *'  three  months  after  demand."  In  October,  that  was 
placed  to  the  debit  of  Cameron's  discount  account,  and  to  the  credit  of  his 
drawing  account.  The  total  was  £10,600.  At  the  beginnmg  of  1854, 
Moiu"0  commenced  with  the  discount  account.  The  "  green  ledger"  was 
begun  in  the  beginning  of  1854.  There  were  three  accounts  of  Cameron's 
in  that  book — the  discount  account,  the  drawing  account,  and  the  cash 
credit.  All  the  notes  and  bills  appeared  in  the  new  discount  account. 
While  Cameron  was  away  ill,  Craufurd  got  these  bills  and  notes  from  me, 
for  the  purpose  of  their  being  compared  with  the  diary.  He  returned  them 
the  same  day.  On  the  26th  of  June,  1855,  I  received  a  note  for  £1000 
from  Craufurd,  and  he  said  I  was  to  debit  it  to  Cameron's  discount  account, 
and  credit  it  to  his  di'awing  account.  It  was  also  entered  in  the  diary,  and 
carried  on  as  a  ciirrent  obligation.  In  Cameron's  discount  account  there  is 
an  entry  of  the  discount  of  a  promissory  note  for  £500,  dated  the  3rd  of 
August,  1854,  and  made  by  Esdaile  in  favour  of  Cameron,  payable  at  the 
City  Saw  Mills.  On  the  6th  of  November,  it  was  entered  as  a  continued 
note ;  and  again,  on  the  6th  of  February,  1855,  on  being  cashed,  it  was 
entered  in  Cameron's  discount  account,  and  also  in  my  diary.  On  the  16th 
of  January,  1854,  there  is  an  entry  of  £3478  2^.  8c?.  advanced  to  Cameron 
on  convertible  securities.  It  so  remained  till  the  end  of  1855.  It  was 
taken  out  after  the  first  balance  struck  on  the  31st  of  December,  1855. 
The  bill  now  produced  is  di*awn  by  Cameron  upon  the  National  Bank  of 
Scotland,  in  favour  of  the  Eoyal  British  Bank,  for  £3500  at  twenty-one 
days'  date.  It  was  discounted,  and  the  amount  placed  to  the  credit  of 
Cameron's  drawing  account.  I  received  the  bUl  from  Craufurd,  the  ac- 
countant. I  had  instructions  from  him  not  to  present  it.  It  was  neither 
presented  for  acceptance  nor  for  payment.  It  was  put  to  the  "  past-due 
bills"  account,  but  I  was  told  by  Craufurd  to  continue  it  in  the  "  country 
bnis."  It  remained  with  the  country  bills  as  a  current  bill  till  the  close  of 
the  bank.  It  remained  to  the  debit  of  Cameron  in  his  discount  account, 
in  the  green  ledger,  till  the  close.  On  the  31st  of  December,  1854,  the 
s\mi  of  £15,396  14s.  6d.  stood  to  the  debit  of  Cameron  in  his  discount 
account.  Of  this  amount,  the  sum  of  £10,600  was  due  upon  his  promis- 
sory notes.  The  witness  not  being  able  to  speak  of  his  own  knowledge 
how  the  amount  was  made  up. 

Mr.  Craufurd  was  here  recalled,  and  said  that,  about  the  time  of  Came- 
ron's  dismissal  (May,  1856),  he  discovered  the  £3500  bUl,  which  had 
escaped  notice  among  the  country  biUs,  and  added  it  to  Cameron's  discount 
account,  making,  with  the  £15,396  14*.  6d.,  a  total  of  £19,146  145.  6d. 
ill-.  Anderson,  on  being  recalled,  said  that  Cameron's  discount  account 


FACTS,   rAILUBES,  AND   FHAUDS.  311 

(with  the  exception  of  the  £3500)  continued  the  same  down  to  the  close  of 
the  bank.  jKothing  was  received  upon  it. — Cross-examined:  None  of 
Cameron's  bills  were  "  initialled."  They  were  never  put  in  the  "  past-duo 
bills"  book.  Esdaile  became  chairman  in  February,  1855.  I  remember 
at  that  time  Craufurd,  the  accountant,  got  the  bills  from  me.  They  were 
in  the  register  of  bills  discounted.  I  kept  that  book,  but  not  at  the  time 
the  bills  were  discounted.  The  first  note  for  £2000  was  discounted  by 
Alladice,  but  it  does  not  appear,  and  I  do  not  know  by  whose  order.  The 
diarj-  was  kept  in  my  ofBcc.  That  book  was  not  taken  into  the  board- 
room. Esdaile's  note  for  £500  was  paid.  It  was  continued  twice.  The 
bank  got  interest  on  it.  The  £10,600  was  carried  on  in  the  same  way. 
Cameron's  bills  were  kept  in  the  same  way  as  all  others  of  the  same  class. 
I  do  not  know  what  the  £10,600  was  for.  I  had  heard  it  was  for  shares. 
As  to  tlie  joint  note  of  Cameron  and  Owen,  for  £446  9s.  3d.,  they  were  sure- 
ties for  a  soUcitor  named  Walker,  who  went  to  Sydney.  A  pohcy  also  was 
deposited  as  security.  The  money  was  got  to  enable  him  to  emigrate. 
Brown's  promissory  note  for  £1000  in  the  same  month  was  paid  for  the 
benefit  of  tSie  bank.  I  beheve  it  was  given  by  Brown  to  Cameron  for 
twenty  shares.  In  1853,  I  found  bills  to  tlie  amount  of  £10,600  standing 
to  Cameron's  debit.  No  interest  was  chained  on  the  £10,600.  I  uudei-- 
stood  from  my  predecessor  that  it  represented  original  shares  in  the  bank. 
Cameron  confirmed  that.  I  iraderstood  the  dividend  was  to  go  against  the 
shares.  The  dividends  on  the  shares  went  to  the  profit  of  the  bank.  The 
balance  of  Cameron's  drawing  account,  at  the  end  of  1854,  was  £220  against 
him.  His  cash  credit  account  was  £3173  12s.  8d.  again.st  him.  In  Janu- 
arj-,  1851,  he  obtained  £3478  12s.  lid.  on  the  transfer  of  securities  from 
the  Irish  Linen  Company.  The  witness  stated  the  account  at  the  31st  of 
December,  1854,  to  be  thus : — Discount  account,  £15,396  14s.  6d. ;  Draw- 
ing accoimt,  £207  15*. ;  cash  credit,  £3173  2s.  8d. ;  debit  on  convertible 
securities,  £3478  2r.  lid. ;  total,  jB22,225  15s.  Id.  On  the  1st  of  Febru- 
ary, 1855,  while  Cameron  was  absent  from  illness,  Esdaile  examined  the 
share  ledger.  This  book  (handed  to  witness)  is  in  the  handwriting  of 
Esdaile,  and  he  made  it  during  Cameron's  illness.  It  contains  an  account 
of  tlie  original  capital  of  1000  shares,  and  all  the  transfers.  It  states  that  51 
sliures  were  in  Cameron's  hands,  value  £2550.  Esdaile  spoke  to  me  about 
Cameron's  promissory  notes ;  the  notes  were  at  that  time  before  him.  He 
said,  **  Surely  these  bills  represent  a  great  many  more  shares  tlian  stand  in 
Cameron's  name?"  The  notes  for  £10,600  would  represent  212  shares. 
The  green  ledger  was  much  before  Esdaile,  and  he  was  much  in  the  mana- 
ger's room.  He  occupied  Cameron's  place,  as  we  considered.  When 
Cameron  returned  after  his  illneae,  he  said,  in  June,  1855,  "  The  directors 
are  wishing  me  to  give  them  back  £1000  of  my  salar}',  but  I  must  make 
them  recoup  at  some  future  time."     He  gave  his  promissory  note  for  £1000, 


312  TACTS,   TAILURES,   AIM)   TEArDS. 

•vrliicli  vras  put  to  tlie  debit  of  his  discount  account,  and  to  the  credit  of 
his  di-awing  account.  He  drew  a  check  for  £1000,  which  went  iato  the 
profits  of  the  bank.  In  1856  I  was  requested  by  Cameron  to  write  him  a 
letter  to  that  eifect,  which  I  did.  [Here  two  letters  from  the  witness  to 
Cameron  were  read,  the  one  dated  the  25th  of  June,  1855  ;  and  the  other 
dated  the  22nd  of  July,  1856 ;  in  the  latter  of  which  the  witness  stated  the 
facts,  and  that  Cameron  had  not  received  any  value  for  the  cheek,  nor  was 
it  passed  to  his  credit.]  The  witness  continued — In  March,  1855,  I  gave 
Esdaile  a  list  of  Cameron's  debts  owing  on  convertible  securities.  It  con- 
taios  an  item  of  £3478  2s.  lid.,  and  £115  1*.  2d.  for  interest  at  5  per  cent. 
I  called  EsdaUe's  attention  to  the  account.  At  the  end  of  1855  I  prepared 
the  usual  Hst.  He  (Cameron)  gave  me  in  January,  1856,  a  di-aft  for  £3500 
on  the  National  Bank  of  Scotland,  but  he  told  me  not  to  send  it  down  at 
once,  without  his  informing  me.  He  said,  "  There  has  been  a  correspond- 
ence regarding  it,  and  though  I  think  it  will  be  paid,  yet  I  wish  you  to 
retain  it,  tiU  I  give  further  instructions."  The  £3478  2s.  lid.  stood  against 
him  on  convertible  secui-ities  till  it  was  taken  off  by  that  note,  and  cancelled. 
I  carried  it  to  his  debit  in  the  green  ledger,  by  his  direction,  and  credited 
his  account  with  that  bUl.  It  is  entered  in  the  abstract  of  transactions  of 
December  31, 1855.  The  booi  (Abstract  of  Transactions)  was  taken  up 
to  the  directors  every  day.  It  was  made  up  every  day.  Before  the  draft 
for  £3500  became  due,  Cameron  gave  me  a  letter  of  the  21st  of  January, 
1856  (read),  saying  that  the  fund  would  not  be  ready  tUl  Whitsuntide  or 
June,  and  asking  witness  to  hold  it  over  meanwhUe.  He  gave  me  70 
certificates  of  shares  in  the  bank,  I  think,  blank  transfers  of  shares  from 
Macleod.  The  draft  was  not  presented  to  the  Bank  of  Scotland,  and  the 
shares  remained  in  the  hands  of  the  bank,  till  it  stopped.  It  (the  di-aft) 
stood  tmder  the  head  of  "  country  bUls  discounted  "  as  part  of  the  assets, 
tni  the  end.  At  the  end  of  December,  1855,  Cameron's  account  stood 
thus : — Discount  accoimt,  £19,146  14ff.  6d. ;  credit  of  drawing  account, 
£693  8*.  10^. ;  notes  of  the  bank  outstanding  in  favour  of  Cameron  to 
debit  of  drawing  accoimt,  paid  by  the  bank  before  it  stopped,  £2090 ;  cash 
credit  debit,  £3503  6^.  lid. ;  total,  £23,896  12s.  Id.  AH  this  sum  stood 
as  assets  of  the  bank. 

Cross-examined. — Esdaile  and  I  compared  the  bills  with  the  diary  on 
the  4th,  5th,  and  6th  of  March,  1855.  I  don't  know  that  Esdaile  ever  saw 
them  before.  The  diary  is  kept  by  the  bill-clerk  ;  it  is  a  calendar  of  bUls 
an-iving  at  maturity.  Esdaile's  note  was  discovered  by  him  on  March  22 
1855.  It  was  paid  three  weeks  after.  The  note,  I  beheve,  was  given  to 
Cameron  for  some  shares.  I  believe  it  was  to  double  his  (EsdaUe's)  quali- 
fication. There  was  a  resolution  to  double  the  quahfication  of  du-ectors. 
Esdaile  belongs  to  the  firm  of  Esdaile  and  Co.,  City  Saw-mills.  The  draft 
drawn  by  Cameron  on  the  National  Bank  of  Scotland  went  into  "  the 


TACTS,  FAILUBES,  AND    FEAUDS.  313 

country  bills  discounted."  Cameron's  name  does  not  appear.  The  daily 
abstract  shows  a  large  account  to  the  credit  of  the  British  Bank  in  the 
Bank  of  England.  In  December,  1855,  the  cash  balance  was  £32,334  3*.  9d. 
The  value  of  British  Bank  shares  in  January,  1856,  was  from  £48  to  £50 
the  £50  shares.  Cameron's  shares  were  not  sold,  and  he  was  still  hable 
for  calls.  The  sum  of  £176  had  been  receiyed  on  Cameron's  account  for 
shootings  in  Scotland ;  and  also  a  sum  of  £270  from  a  person  in  Scotland 
named  Binning,  in  November,  1856.  Both  these  sums  woidd  go  to  the 
credit  of  Cameron's  debt. 

Re-examined. — Cameron's  name  appears  in  the  register  of  advances  on 
convertible  securities,  and  in  the  register  of  country  bills.  The  accoimts 
are  in  the  green  ledger.  The  British  Bank's  credit  with  the  Bank  of  Eng- 
land consisted  of  checks  and  surplus  cash ;  and,  when  required,  it  was 
obtained  by  discount  of  bQls.  The  discounts  have  exceeded  and  also  fallen 
short  of  the  balances.  No  statement  of  the  personal  accounts  of  customers 
was  laid  before  the  board.  First  spoke  to  Stapleton  about  Cameron's 
account,  after  Cameron  had  left,  in  July,  1856.  He  expressed  great  sur- 
prise, and  spoke  with  some  warmth.  I  received  seventeen  shares  to  liqui- 
date an  account  of  Urquhart's. 

John  Finlayson  said — I  live  in  Scotland.  In  1842,  I  went  into  the 
service  of  Cameron,  at  Dingwall,  as  clerk.  He  was  a  writer  and  agent.  I 
remained  with  him  till  aft«r  the  opening  of  the  JBoyal  British  Bank,  till 
1850  or  1851.  He  came  to  London  in  1849.  Some  years  before  that,  he 
had  been  farming  some  land  with  a  Mr.  Ure.  Mr.  Ure  got  into  difficulties, 
and  ilr.  Cameron  had  to  take  the  farm  into  his  own  hands.  I  know  that, 
to  liquidate  the  debts,  an  account  was  opened  with  the  National  Bank  of 
Scotland — a  cash  credit  account.  Mr.  Alexander  Matheson  became  security 
for  £5000  for  Mr.  Cameron,  That  sum  was  not  enough  to  pay  off  the 
debts.  A  debt  existed  on  the  farm  as  long  as  I  was  connected  with  it. — 
Cross-examined  :  For  thirteen  years  Cameron  had  been  Provost  of  Ding- 
wall. He  was  in  the  Commission  of  the  Peace,  and  Deputy-Lieutenant  of 
two  counties  in  Scotland.  He  was  Chamberlain  for  two  counties.  Boss  and 
Cromarty.  He  had  been  for  thirty  years  Clerk  of  the  Peace,  Pubhc  Prose- 
cutor, and  Clerk  to  the  Commissioners  of  Supply.  He  had  been  for  many 
years  receiver  of  Bishops'  rents,  and  was  in  high  repute  as  a  man  of  integ- 
rity. He  was  agent  of  the  National  Bank  of  Scotland,  at  Dingwall.  He 
had  acted  in  large  transactions  in  the  sale  of  estates,  and  he  (witness)  be- 
lieved he  had  claims  for  commission.  He  was  agent  in  Scotland  for 
gentlemen  of  large  property.  He  had  also  real  property  of  his  own,  which 
the  bank  had  taken  no  steps  to  realize.  He  also  had  extensive  sheep-walks, 
and  a  large  number  of  sheep,  about  6000.  As  chamberlain,  ho  was  factor 
of  Crown  rents. 

Mr.  Hmry  Empson  was  then  examined. — He  said,  I  am  an  attorney  in 


314  FACTS,    FALLUEES,   AND   FBATJDS. 

Moorgate  Street.  I  was  common  law  agent  for  Messi-s.  Paddison  and 
Mullins.  I  remember  the  clerk,  Gratherer,  coming  to  me  from  the  Eoyal 
British  Bank.  I  accepted  a  transfer  of  bank  shares,  in  May,  185i.  My 
came  was  used  as  trustee  for  the  bank.  The  same  occurred  again  in  1855 
several  times.  The  shares  had  previously  been  piu-chased.  Sometimes 
Craufurd,  the  'accountant,  and  sometimes  Gatherer,  communicated  with 
me.  I  accepted  and  signed  transfers  of  shares,  as  tinistee  for  the  bank.  I 
knew  nothing  of  the  transactions  in  the  books  of  the  bank  in  my  name,  till 
after  the  stoppage. — Cross-examined:  I  had  no  communication  with  Esdaile, 
till  a  day  or  two  before  the  close  of  the  bank. 

Mr.  Craufurd  recalled,  said — On  the  11th  of  June,  1855,  an  account 
was  opened  in  the  bank  books,  called  "private  account  of  Henry  Empson." 
I  believe  the  account  was  opened  by  Cameron's  directions.  The  witness 
here  referred  to  several  entries  in  the  account.  It  was  headed  "  Henry 
Empson' s  private  account."  The  first  entry  was  "  7  shares  purchased  of 
the  executors  of  Lady  Adare,  £350."  The  same  day  there  was  another, 
"40  shares  purchased  of  W.  Walker,  £2000."  Mr.  Cameron  desired  me 
to  make  the  purchase.  The  money  was  paid  out  of  the  bank's  fund.  On 
the  30th  of  June  the  accoimt  was  balanced ;  it  was  £2350.  On  the  1st  of 
November  there  is  an  entry,  "  30  shares,  from  Scott  and  Sons,  brokers  for 
Pixon,  £1500."  Empson's  account  is  debited,  "  purchase  money,  commis- 
eion,  and  stamps,  £1511  5*."  On  the  28th  of  November  there  is  "  pur- 
chase of  one  share  from  Norwood,  and  stamps,  £50  V*.  6d."  The  bank 
paid  the  money. — Cross-examined :  I  believe  the  suggestion  originated  with 
Cameron,  but  I  can't  recollect  the  time.  Mr.  Empson's  name  was  given 
to  me  as  the  purchaser  of  the  shares.  I  asked,  "  Am  I  to  charge  them  to 
an  accoimt  in  his  name?"  and  he  said,  "  Yes."  The  account  began  on  the 
11th  of  June,  1855.  I  was  aware  Empson  held  shares  in  trust  for  the 
bank,  for  Cameron  told  me  so.  I  had  intimated  to  Cameron  that  the  shares 
in  which  the  bank  was  interested  should  be  held  in  the  name  of  a  trustee. 
He  (Cameron)  mentioned  some  one  in  the  house.  I  objected,  as  he  was  a 
servant  of  the  bank,  and  sugges